Wellington After the Quake

This pdf was recreated from the original publication files in March 2011.

Please Note: The contact details given in this 1995 publication are no longer correct. Current contact information (2011) is: New Zealand Centre for Advanced Engineering Private Bag 4800, Christchurch 8140, New Zealand

Phone: +64 3 364 2478 Fax: +63 3 364 2069 E-mail: [email protected] Web: www.caenz.com The Challenge of Rebuilding Cities

Proceedings of a conference held in Wellington, New Zealand, 27-29 March 1995

July 1995 Jointly published by: EQC EARTHQUAKE COMMISSION and the

Centre for Advanced Engineering

ISBN 0-908993-10-2

First published July 1995

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, transmitted, or otherwise disseminated, in any form or by any means (except for the purposes of research or private study, criticism or review) without the prior permission of the Earthquake Commission.

Copyright © 1995 Earthquake Commission, Wellington Compiled by Geoff Gregory, Word Therapy, Paraparaumu Editorial Services and Book Design Janine Griffin and Charles Hendtlass, Centre for Advanced Engineering Printing Piranha Print, Christchurch Cover Design Ken Hudson Graphics, Christchurch Cover Photograph View to the southwest over Wellington's central business district, built largely on reclaimed land which is susceptible to liquefaction during a major earthquake. The Wellington fault runs close to the base of the hills in the background. (Photo: Lloyd Homer, Institute of Geological & Nuclear Sciences). Disclaimer It will be noted that the authorship of this document and comments have been attributed to the many individuals and organisations involved. While all sections have been subject to review and final editing, the opinions expressed remain those of the persons responsible and do not necessarily reflect the views of the Earthquake Commission or the Centre for Advanced Engineering. Foreword

he Wellington after the Quake conference sought to answer the questions faced by everyone in authority when cities commence recovery after a disaster: What happens next? T What do I do now? I proposed the conference within the Earthquake Commission (EQC), both to provide background for our own disaster management planning and to assist public and private planning for disaster recovery. All other government agencies or departments, local authority councils, businesses, or large organisations that face severe damage in a disaster need to plan their recovery. In order to do so, they, like EQC, need a basis for their planning.

The conference set out such a basis by identifying the problems sure to be faced and by indicating possible solutions based on world and New Zealand experience. Much of the planning in the public sector relating to disasters has focused on the response phase — people’s needs immediately after a disaster. So, too, with businesses, disaster recovery planning has focused on ways of getting the business up and running immediately, somewhere, somehow. Neither has dealt to any extent with the longer-term recovery from a disaster, including reconstruction of facilities, rebuilding of communities, and rebuilding of organisations.

This conference brought together world and New Zealand authorities, with academic and technical expertise and with practical experience.

The conference concentrated on Wellington, but by bringing to bear the best knowledge from around the world, its results are applicable to many cities around the world. The insights from this conference should be of value in every city that faces a risk of natural disaster.

The conference was substantially supported by major sponsors, who are listed on page iii. The Earthquake Commission thanks the sponsors on its own behalf and on behalf of all those who attended the conference. Thanks are also due to the members of the organising committees for their invaluable help in making the conference a success.

Ian McLean

Chairperson, The Earthquake Commission

i ii Acknowledgements

EQC expresses its thanks to:

Principal Sponsors

New Zealand Fire Service Commission

Alexander Howden Group Ltd

NZ National Society for Earthquake Engineering

E W Payne and INSTRAT (UK)

Willis Faber & Dumas

Sponsors

Canon Machines (NZ) Ltd • Institute of Geological & Nuclear Sciences Ltd • Marsh & McLennan Ltd • Wairarapa Electricity Ltd • Frank Russell Company

iii Members of the working committee

Ian McLean, Chairperson, EQC • David Middleton, General Manager, EQC • Leicester Steven, Commissioner, EQC • Jacquie Hamer, NovaTech (NZ) Ltd, Project Manager • Lawrie Bryant and Rosemary Miller, International Public Relations • Geoff Gregory, Word Therapy • Bruce Jones, NZ Fire Service Commission • Neil Britton, Wellington City Council

Members of the steering committee

Those listed above, plus Dallas Moore, Ministry of Civil Defence • Paul Officer, Ministry of Civil Defence • Pat Helm, Prime Minister’s Department • Graham Miller, Wellington Regional Council

iv Contents

Page

Foreword i

Acknowledgements iii

Wellington After the Quake: Introduction

The scenario: The great Wellington quake of 1995 3

Executive summary and recommendations 7

Organisation, Government and Legislation

The significance of Wellington being the capital in a disaster 15 John Roberts

Organisation, government and legislation: Who coordinates recovery? 23 Jim Rolfe and Neil R Britton

Panel Discussion 35

Rebuild? Where?

Urban relocation after earthquakes: Why do cities stay where they are no matter how many times they are damaged? 41 Dennis S Mileti

Planning for reconstruction: Opportunities and constraints facing Wellington 47 Steven P French

Keeping catastrophic change in context 55 Christopher McDonald

Discussion 61

Economic and Social Framework

The economic impact of earthquake disasters 65 Hal Cochrane

Disaster recovery as a social process 81 Joanne M Nigg

Discussion 93

v Page

Physical Reconstruction 1

Physical reconstruction: Timescale for reconstruction 97 Claire B Rubin

Assessment of resources required for reinstatement 111 David C Hopkins

Physical reconstruction: Availability of material, labour and plant from within New Zealand and the role of the private sector 121 Tony Lanigan

Physical Reconstruction 2

The role of overseas organisations in disaster recovery efforts 139 W R Washburn

The logistics of importing materials to the Wellington region, housing the workforce and construction bases 145 John H Christianson

Discussion 157

Legislative Framework

Current planning and construction law: The practical consequences for rebuilding Wellington after the quake 161 John E Feast

Discussion 171

Social Aspects of Recovery 1

Earthquakes: A Maori dimension 175 Wira Gardiner

Social Aspects of Recovery 2

Coordination and accessibility of post-disaster counselling and community support services 183 Rachel Scott

Social aspects of recovery: The response of government agencies 191 Hon Bruce Cliffe

Discussion 197

vi Page

Recent Overseas Experience

Kobe presentation 201 Kiyoyuki Kanemitsu

The great Hanshin earthquake 205 Robert Park

The Philippines after the 1990 quake and the Pinatubo eruptions 209 Jose P de Jesus

Insurance and Financial Markets 1

Handling risk and claims after a catastrophe — An engineer’s perspective 217 Peter I Yanev with Charles R Scawthorn and W Rodney Smith

Role of insurance companies in disaster recovery 229 Christopher Henri

The Earthquake Commission’s preparations for disaster 245 David A Middleton

Insurance and Financial Markets 2

Reinsurance — Its contribution to risk assessment and disaster management 255 Werner Schaad

The role of the finance industry 263 Sir Frank Holmes

Discussion 271

Conclusions

Looking forward from the conference: Where to now? 275 Ian McLean

Index 279

vii viii Scenario

Wellington After the Quake: Introduction

1 Wellington After the Quake

2 Scenario

The scenario: The great Wellington quake of 1995

he early morning flight from Christchurch There are problems, too, in the harbour. A had begun its leisurely descent to Welling- number of vessels appear to be damaged, T ton, still some 15 minutes away. The quiet of indicating vertical movement of the harbour bed. the cabin was broken by the voice of the aircraft That is the extent of the pilot’s report so far. captain from the flight deck: Reports of damage are now coming in from Ladies and Gentlemen, I am sorry to tell you that Masterton and Palmerston North and from since we left Christchurch there has been drama Blenheim, but as yet there are no details. elsewhere. At about the time we left Christchurch, As further information comes to hand, we will the Wellington region was hit by what is believed bring it to you. I fear that this is the day we all to be a major earthquake. The situation is still hoped we would never see. very confused but it is believed that damage is severe and extensive. Air Traffic Control have Four weeks later, an extract from the midday news advised that we are not to attempt to land at bulletin: Wellington, but along with all other aircraft destined for the capital we are to return to the For the past four weeks, Wellington has been point of departure. counting the cost of the recent earthquake. Priority is being accorded to the restoration of And later that morning on national television: essential services and the provision of temporary accommodation for those whose homes have We interrupt this programme to bring you a either been destroyed or that are for other special news bulletin. Central New Zealand was reasons uninhabitable. Access to the city area is this morning rocked by a major earthquake and still limited. The airport is still not open to civilian there are fears that damage in the Wellington aircraft, and only very limited access is possible area is on a scale not seen before in this country. via the two road routes north, the Ngauranga Communications links with Wellington are all Gorge and the Hutt Road. No train services are down and this bulletin is coming to you from a operating. newsroom in Auckland. The only information to hand has come from the captain of an Air New The expected rush of claims to insurance compa- Zealand aircraft making an approach to Welling- nies has not eventuated, no doubt due to the ton Airport when the quake struck at approxi- continued disruption of communications. Prelimi- mately 8:15 am. All incoming aircraft have nary estimates of the likely cost are nevertheless returned to the point of departure with the starting to emerge. A spokesman for the Earth- exception of one aircraft, which has carried out a quake Commission has put the insured loss to low-level sweep over the city and the Hutt Valley. residential property within the Wellington region at $1.9 billion, with a similar amount for damage The pilot reports that a pall of dust and smoke to industrial and commercial premises. The hangs over the city, with several fires burning in Minister for Disaster Recovery has stated that the central business area. There are no obvious damage to uninsured government property and to signs of traffic movement within the city. the infrastructure will exceed $1 billion. There is no traffic moving on the Hutt Motorway The Minister emphasised that even though and it seems that the road is blocked by a Wellington, as the seat of government, had number of rockfalls and landslips. There is no suffered violent disruption, there was no thought traffic movement on the Ngauranga Gorge. of moving essential elements of government, Closer to the city, the Thorndon area appears to such as the Cabinet, out of the city. have suffered badly. The motorway structures are damaged, and a commuter train lies close by on He also indicated that he had asked for a report its side. The railway line has slumped into the on whether emergency legislation was required to sea. facilitate the recovery and rebuilding of areas hit by the quake.

3 Wellington After the Quake

Little progress has yet been made in clearing associated with a magnitude 7.5 earthquake at a debris from the city streets. Authorities are having depth less than 30 km. The average recurrence difficulty getting access to disposal sites. interval for such an event is about 600 years and the probability of it occurring in the next 50 years is A spokesman for the building industry today said estimated as 11 percent. This is seen as the “maxi- that contractors were already having difficulty mum credible event”. determining priorities, and he spoke of likely shortages of both materials and skilled man- The damaging effects of such an earthquake would power. extend beyond the Wellington region, north into Manawatu and Wairarapa and south to Marlborough, Fiction? Of course. But prophetic? Time alone will Nelson, and possibly to North Canterbury and tell. Westland. Whilst recognising this, this conference is New Zealand sits somewhat uncomfortably on the concerned only with the effect on the Wellington “Rim of Fire”, a zone that encircles the Pacific region. Ocean, exposing land masses within it and adjacent The description that follows sketches the challenge to it to the consequences, both frightening and that will face those charged with the task of rebuild- potentially devastating, of sudden movement in the ing a region after such a seismic event. land mass.

Each year, some 12,000 earth tremors are recorded, It happened one Tuesday morning... each a reminder that our position is not one of In the conference scenario, the main shock occurred comfort. All but some 500 or so pass unnoticed by at 8:15 am on a Tuesday morning. After a very sharp the “man in the street”, but from time to time, the initial jolt, violent shaking and rolling continued for reminder is less gentle and the land form in many some 30 seconds and was felt in varying degrees parts of the country bears witness to this. over much of the south of the North Island and throughout the north of the South Island. After- Since organised European settlement of the colony shocks continued throughout the day, and those began in the mid-nineteenth century, there have been immediately following the main shock were felt over a number of major events. The most severe origi- a wide area. nated on the Wairarapa fault in 1855 and is believed to have been of magnitude 8. There was vertical The MM IX isoseismal encompasses much of the movement of up to 3 metres and possibly surface land west of the harbour. More severe shaking — breakage over about 50 km. MM X — is apparent in parts of Karori, Ngaio and Johnsonville, along the length of the Wellington- In many of the succeeding years, there have been Hutt motorway and within the central business events that have resulted in changes to the land form district of the city. An MM XI isoseismal embraces and damage to the infrastructure, property and the Thorndon area and harbour land to the south, buildings. With the exception of the 1931 Hawkes Lyall Bay and portions of the Miramar Peninsula. Bay earthquake, which devastated the towns of Napier and Hastings and caused 256 deaths, damage Movement has occurred along the line of the in major urban areas has been relatively minor. Wellington fault, with uplift generally of the order of 1 metre; horizontal displacement is generally 4 Such immunity will not continue, with the Welling- metres. ton region in particular being susceptible to major damage and disruption from earthquakes. Liquefaction of soils has occurred at several locations around Wellington, including Evans Bay, State It is against this background that this conference is Highway 1 from Porirua to Paremata, and Seaview. directed at the challenge of rebuilding a city that has been the site of a major seismic event. Rockslides and landslips are concentrated in the Ngauranga and Ngaio Gorges, along the Wellington The context of the programme is set against the fault scarp, the slopes above the Seaview area and background of a large earthquake centred on the State Highway 58 from Paremata to Pauatahanui. Wellington-Hutt Valley segment of the Wellington fault. Rupture of this fault segment is expected to be

4 Scenario

Casualties Infrastructure Known deaths total 1600, injured 10,000. Elements of the region’s infrastructure have suffered severe damage and some services will be restricted Building damage for many months. In the outer areas such as Lower Hutt and Porirua, Utilities the majority of the old, unstrengthened brick and masonry buildings have been severely damaged; Underground pipelines have generally suffered more than 40 buildings have completely collapsed severe damage, and water, sewerage and gas serv- and a further 100 buildings are in various stages of ices will be restricted over much of the area of the partial collapse and require demolition. city for several weeks.

Near the Petone foreshore and at Seaview, liquefac- Electricity tion of the alluvium and reclaimed ground has occurred, resulting in considerable damage to A restricted service to all areas is likely to be buildings, many of which have either settled or have available in two weeks. severe foundation damage. Telecommunications Most streets in the Wellington central business A restricted cell-phone network will be available district are blocked by debris. A significant propor- within a day or so, otherwise only a restricted trunk tion of old brick and masonry buildings, particularly line service will be available for some weeks. those built before 1935, have been badly damaged and some have collapsed. At least five 1960s and 1970s multi-storey buildings have failed, with Roading shearing of concrete columns leading to partial Restricted vehicular access within the region will be collapse of several storeys. Other multi-storey available within about five days. Access into and buildings have suffered damage, with access to some from the region is likely to be severely restricted for 100 buildings restricted due to jamming of lifts and, a month or more. in some cases, damage to stairs.

Multi-storey buildings of recent construction are Rail damaged to varying degrees, with loss of glazing Rail traffic north from Upper Hutt will resume and some outer building fabric such as precast within a day or so. No rail traffic in or out of panels. Wellington is likely for two to three months.

Interiors of most buildings have been damaged, with Airport the collapse of suspended ceilings and overturning of equipment. Approximately 500 buildings are no Subject to availability of plant, the airport is likely to longer habitable due to internal damage and loss be open to restricted traffic within two to four days. and/or damage to essential services. Unrestricted movement of civilian aircraft is unlikely for some months. Building damage has been greatest on the area of reclaimed land adjacent to the harbour foreshore. Ground subsidence has occurred, causing several buildings to tilt alarmingly, and many streets are completely blocked.

Housing stock throughout the area has suffered serious damage. Some houses have been destroyed and over 3000 are uninhabitable due either to damage or to lack of essential services. A further 40,000 properties have suffered damage to either the dwellings or the contents.

5 Wellington After the Quake

6 Executive summary and recommendations

Executive summary and recommendations

he theme of this conference was recovery — less, politicians have accepted that Wellington is the challenge of rebuilding cities after a sufficiently vulnerable to warrant a plan to remove T disaster. key elements of the central executive from Welling- ton in order to ensure continuity of government. Emergency management needs to look beyond the emergency response phase. It should examine the There needs to be a sensible balance of responsibili- restoration of the affected region, including its ties between those affected. The government expects services and facilities and the lives of its resident individuals, businesses, and local authorities to play and working population. their part and take prime responsibility for disaster management. They must be encouraged and empow- After the big quake in Wellington, central govern- ered to minimise, mitigate and manage disaster. ment functions would be jeopardised, an economic crisis might arise, vital national transport exchanges Government does not shirk its responsibilities, but would be severely hampered, business, industry and wants the risk to be shared. Central government tourism would be severely disrupted and stress continues to cover a large proportion of infra- would extend far beyond the boundaries of the structural recovery costs. But in doing so, it transfers Wellington region. appropriate responsibility for the recovery as a whole on to those with a direct interest. Among local Recovery is a very long process and needs to be authorities and those directly affected, there is considered and planned for in the pre-impact period, inevitably a far superior appreciation of local risks together with planning for the immediate response than in central government, and recovery is most and mitigation. Knowledge of the mechanisms and likely to be successful when the local community procedures of recovery is a relatively new area of has control over the speed and direction of the disaster research. However, recent attention to the recovery effort. vulnerability of physical utilities, although addressed to the response phase, has also been invaluable in Wellington city, with the Wellington region, has increasing our awareness of what might be involved started its pre-impact planning process and is in a in reconstruction. There is increased understanding good position to be in control of its own destiny. The of the potential problems that must be considered emergency management planning and preparation and resolved before the disaster strikes a community done have satisfied central government departments, or region. Only by using this in recovery planning whose role would be to support them rather than will it be possible to act effectively to reduce human compete with or replace city initiatives. Although no suffering, minimise economic loss and disruption in recovery programme will ever be without problems, the private sector, and restore some normality to the conflict and upheaval, a framework has been affairs of the nation. established and a dialogue started with all essential participants, including central government. This will Government and responsibility ensure that the rebuilding of Wellington takes place in an environment of cooperation and coordination. The preservation of the executive, legislative, and judicial arms of government is critical in order to Plan in advance preserve the sovereignty of the nation and demonstrate that the democratically elected government is Advance planning for urban relocation and recon- continuing its function. The government should also struction after future urban earthquake disasters be capable of responding to the extra demands should be an integral part of risk mitigation. In most occasioned by the earthquake. places, there has been a marked neglect of disaster recovery plans compared with preparedness plans. The likelihood of damage on a scale that would However, it is becoming increasingly important to render the majority of government buildings unus- manage reconstruction as efficiently and effectively able is low, and the government’s initial task would as possible. Apart from the general desire to reduce be to ensure that it continued to function effectively human suffering, there is a need to restore the from the current parliamentary complex. Neverthe-

7 Wellington After the Quake economy and business activity quickly, and there are recovery following disaster consists of three interde- many other pressures to expedite recovery. pendent components — social, economic and physical. A major impact on any one component in From the standpoint of the victims, the period of the system will have dramatic effects on the other reconstruction and general community recovery can two. For community recovery to be effective, plans never be short enough. People want to return to must include contingencies for all three elements. To normal conditions quickly. They seldom want to date, New Zealand has not adequately planned for relocate, even after experiencing the worst impacts the long-term social and economic effects of disas- of disaster. Damage is seldom extensive enough to ters. make relocation a real option, and in any case the funds needed are not usually available. Existing The impact on a city is far greater than the obvious procedures and organisational arrangements favour costs of repairing damaged drains and cables. There piecemeal decision-making, and few communities are also hidden costs in the provision of long-term have the kind of pre-disaster plans needed to effec- community support services. Accommodation, tively influence post-earthquake reconstruction and employment, health and general community wellbe- relocation decisions. Past earthquake events have ing are all significantly affected after disasters. As shown that the normal ways of doing business are one example of the extra burden on already over- not adequate to accommodate the needs, particularly loaded support services, if 20 percent of the popula- in terms of the pressure for speed in approving tion in the Wellington region became homeless, projects and the volume of applications. there would need to be plans for sheltering or rehousing approximately 80,000 people, including We can prepare for calamity by having sound, the provision of food, water and medical care. popular, well-understood urban design policies in place long before disaster strikes. However, the The social relationships and conditions that exist implementation of these proposals should not be before any disaster will be carried forward into the deferred until then. Plans for a better city deserve to relief and recovery periods. Those individuals be actioned immediately. Although a major tremor without financial resources will find it even more will leave its mark, those who survive the catastro- difficult to meet daily needs. Those with compound phe will still inhabit a familiar place. problems — the poor elderly, poor single-parent families, poor families with disabled members — We can also lower the vulnerability of the city to will not only find it difficult to find temporary future events by having a reconstruction plan in assistance, but the organisational and social relation- place before the big earthquake occurs. The plan ships that made it possible to function in normal should include: times may be absent for an extended period after the • designation of a lead agency to manage the earthquake. reconstruction; It is also particularly important to be sensitive to the • detailed maps of the earthquake hazard and cultural perceptions of the Maori and their commu- inventories of the local buildings and infrastruc- nity structures, to establish linkages beforehand with ture; the various marae, and to use Maori liaison officers •identification of areas where reconstruction in all dealings, especially during the rescue and should be limited to lower densities or relocated; recovery phases. Cultural awareness of other ethnic groups is also needed during recovery. •identification of less hazardous areas that can serve as receiving areas for relocated develop- Many smaller businesses are vulnerable, particularly ment; and to short periods of disruption of essential services •identification of financing mechanisms that will such as electricity and water — the so-called support reconstruction, particularly for afford- “lifelines”. If one knows what businesses are able housing and other non-market uses. dependent upon which lifeline systems, it allows emergency managers, in conjunction with lifeline service providers and the business communities, to Social impact engage in informed, strategic planning before and There is a need in New Zealand to look more closely after a disaster for ways to reduce economic disrup- at the social impact of earthquakes. Community tion.

8 Executive summary and recommendations

Physical resources and logistics The logistics of the situation are daunting. Severe disruption of road and rail and their associated Considerable physical resources will be required to structures will occur because of land modification reinstate Wellington after a major earthquake, and and landslips. This will prevent the movement of the success of the recovery effort will centre around heavy equipment into and throughout the region. In the planning and preparation that has been done in turn, this will hinder demolition and the clearing of anticipation of the disaster. Surveys of the resources sites to enable any rebuilding to proceed. The required for reconstruction were presented in a way feasibility of creating emergency beach landing that allowed analysis of various recognised catego- facilities away from existing port areas, where ries of materials, plant and labour. This assessment facilities will be unusable, needs investigating. forms a valuable starting point for realistically Strategic stockpiles of rebuilding and repair materi- gauging the time required for recovery and the likely als could be established on the Wellington side of availability of resources to complete the reinstate- the mountains and areas designated for tipping spoil. ment within a particular period. It could take more than four years to rebuild some of Assuming a reconstruction period of four years, the damaged structures, and some will never be there would be a manageable demand on available rebuilt because of owner and tenant flight. materials, plant, and labour from within New The Civil Defence Act is written around disasters of Zealand. The demand for labour could be satisfied short duration. Consideration should be given to by redeployment of existing resources from within establishing provisions for coordinated action, such New Zealand, but there would be a major problem as is possible in the Philippines and USA under their with their accommodation requirements, e.g. the legislation. 15,000 extra workers required for construction work once demolition had been completed. Legislation However, there is a major shortage of contractors Existing legislation, which is not designed to cope skilled in the demolition of tall buildings and heavy with an emergency situation, may have to be structures. The immediate post-earthquake phase suspended or a moratorium imposed for a term. It will also require large numbers of engineers with was a widely held view of people consulted that the assessment skills and assessors for damaged struc- consent procedures of the Resource Management tures. Contingency plans should be put in place to Act and some aspects of the Building Act would not bring in US or other overseas expertise. operate effectively under the conditions envisaged. The work of the Wellington Earthquake Lifelines However, once there is sufficient political momen- Group, which to date has focused primarily on pre- tum, the fact that the existing rules do not work will recovery phase activities, serves as a useful template not matter. They will be changed to meet the for extending planning to the recovery phase. The exigencies of the situation. This is not seen as fatal key to success will be to involve the private sector in to the long-term prospects for the existing legislation appropriate response planning exercises, as the — one should not expect standard rules to operate majority of resources used for recovery will come under emergency conditions. Some design criteria from the private sector. may be changed, and the performance-based code will almost certainly have to be reviewed in the light The recruitment and training of the necessary labour of actual performance. What may have been consid- resources and the management of their deployment ered adequate before the quake may be considered calls for the skills of organisations that have had quite inappropriate after it. experience with large-scale project management. These organisations, perhaps in a consortium, could From a practical point of view, it may become provide the necessary interface between property necessary to set aside some problems to enable owners and their insurers for managing the recovery planners and building inspectors to focus on those phase. priority areas of the city and environs that can be returned to normality first. By strategically involving offshore organisations and maximising the skills and resources they can provide, a more timely, economical and effective recovery could be achieved.

9 Wellington After the Quake

Recent events in the Philippines and but also governments and welfare agencies. The Japan 1994 bushfires in New South Wales revealed that 22 percent of the homes and 52 percent of the contents Experience in the reconstruction efforts in the of homes totally destroyed by fire were not insured. Philippines showed the wisdom of mobilising People choosing not to insure their prime assets human and material resources in systematic phases. ranged across the socio-economic spectrum. Under- What might have been scientifically and technically insurance was also a problem. The percentage by rational solutions are not always politically and which homes were generally under-insured in these socially acceptable, and might have to be modified bushfires was 30 percent, and in some socio- to secure the necessary cooperation and participation economic groups it was as high as 50 percent. from the local community. Early-warning systems, as well as education of the public, were important to There is a section of the community that does not reduce loss of life and mitigate damage to physical believe in insurance and chooses to carry the risk infrastructure. Finally, good political leadership was themselves, believing that a disaster can never vital at both national and local levels. happen to them. However, it is this section that becomes the major beneficiary of appeal funds, In Kobe, there were detailed plans for emergencies, which means that instead of transferring their risk to but the authorities had not expected so much damage an insurance company, they have merely transferred to transportation systems and lifelines, such exten- their risk to the generosity of their fellow citizens. If sive subsidence and liquefaction damage, or such adequate insurance is in place, a large element of loss of lives and homes of reconstruction workers. disaster trauma can be eliminated. To respond better, they advise: • having quake-proof water tanks at schools, The Earthquake Commission (EQC) will meet its hospitals and other major buildings; responsibilities for the rebuilding of Wellington by planning meticulously for the event, leaving nothing • having back-up control systems, facilities and to chance. If necessary, EQC can move its opera- plant for all businesses; tions to an alternative site near Auckland. Its plan is •providing alternative connecting routes; to link into the insurance industry’s emergency plan, • having an underground tunnel for utilities; and obtain additional claims-assessing resources from overseas, and operate its office, expanded by •securing communications by use of satellites, etc. temporary telephone and inputting staff. Constant review will be needed to maintain currency with Insurance and reinsurance available technology, increasing knowledge of seismic disasters and the circumstances of all the Damage from the most recent earthquakes in Los partner organisations involved. This plan is the first Angeles, where the structural characteristics of most step in a four-part process of responding to a buildings are similar to Wellington’s, was much catastrophe, the whole of which involves planning, more extensive than predicted by the insurance initialising the plan, sustaining the catastrophe industry. Damage to some modern buildings, e.g. response organisation during the emergency and, some steel-framed ones, as well as older ones, finally, shutting down the operation in an orderly exceeded the worst expectations of structural manner. engineers. A contributor to these results was the record-high ground motions experienced. The total Because of Wellington’s high seismicity and direct loss of about US$20 billion and an insured insurance density, reinsurers have been carefully loss exceeding US$12 billion (much of it to earth- monitoring and analysing the earthquake risk for quake-resistant residential construction) constitute some time. Primary insurance companies in New the largest insured losses in US and world earth- Zealand and other interested parties have already quake history, excluding major fire following the been notified of the results of corresponding model shaking. Similar, pro-rated scenarios are expected calculations. On the whole, reinsurers should have for the Wellington earthquake, unless the lessons of no difficulty with the Wellington earthquake, very recent history are carefully studied and applied. although some allowance should be made for the ongoing privatisation of earthquake cover for In major Australian disasters, the degree of noncommercial/industrial risks. There will be enough insurance surprised not only the insurance industry, reinsurance capacity available provided that infor-

10 Executive summary and recommendations mation is explicit enough to quantify the risk rebuild their lives while the politicians, engineers precisely and the price of the cover is adequate for and planners will want to rebuild their city. both insurer and reinsurer. • The time to plan for rebuilding is before the disaster, not after it has happened. We need to Economics and finance know in advance what we want to restore, what There are a number of similarities between the we want to redesign and what we want to coming Wellington quake and the recent Kobe relocate, so that people already know what is to disaster. Both cities are important ports and their be done when the time comes and can move to economies contribute a significant proportion of implement the plans for recovery efficiently. We their respective nation’s gross domestic product need to have had time to work through the (nearly 10 percent). However, the relative magnitude consultation and decision processes with due of loss, ability to rebuild and access to financial deliberation and care, without the stresses of resources are all vastly different. The indirect loss immediacy and the understandable desire of the model suggests that Wellington would suffer affected population to restore some degree of disproportionately greater indirect losses, bringing normalcy to their lives as quickly as possible. total losses to 300 to 500 percent of New Zealand’s • In any disaster, the people who are affected will annual national savings. This is due to differences in want to know who is in charge and who sets the the capacity and scale of the two economies. priorities. Now is the time to determine with the utmost clarity what the arrangements will be. There is a need to anticipate the major issues that There is no time after the disaster for a commit- would confront those responsible for the implemen- tee to sit down to try and decide these things. tation of monetary and economic policy if a major earthquake occurred in Wellington. It would be • Ownership of the rebuilding plans has to be valuable to run an occasional contingency planning shared by central government, regional councils, exercise, involving Treasury, the Reserve Bank and city and district councils, the insurance industry, other major participants in the financial system. It private business, and the local communities. could well uncover potential weak spots in the However, the question of who is to coordinate all financial system, which might threaten to destabilise of the activities is yet to be resolved. it unless corrected. It could illuminate the issues that • Any system that is devised needs to be applicable would confront the bank in sustaining price stability. to any city in New Zealand. It needs to be widely It could provoke consideration of whether the rather understood and ready in advance. Moreover, it fragmented arrangements for coordination of needs to be tested in advance. financial and economic policy now prevailing would • Despite efforts of civil defence organisations, be adequate to deal with such a crisis or require there is still widespread lack of awareness of the special machinery. It could also stimulate discussion recovery aspects of disasters. There needs to be a on whether there might be “gaps” in the provision of well-directed public education campaign to certain types of finance to meet such an emergency, communicate existing plans and any future e.g. the availability of equity finance (or temporary developments. substitutes for it) that would help carry worthwhile enterprises through their temporary difficulties • A considerable amount of pain and destruction without becoming excessively indebted. This might can be avoided by much greater mitigation require collective action in addition to what indi- efforts. Inducements need to be created to force vidual financial enterprises would be able to pro- urgent retrofitting of buildings and other struc- vide. tures. • The logistics of the situation are formidable. We What happens next? What do we do need to know who plans for the temporary now? facilities to be provided, for the transport in of • Planning for recovery from any disaster is about heavy equipment, for the accommodation for the people as well as buildings. People come from a workforce and their supervisors, not to mention wide variety of ethnic and social backgrounds. thousands of refugees — the regional or city They have diverse needs, and may be hungry and councils, the Ministry of Civil Defence, or the frightened and homeless, and English may be a Prime Minister’s DESC organisation. second language to them. They will want to

11 Wellington After the Quake

• Decisions have to be made about the provision of organisations concerned to get together to share lifelines services to ensure that mitigation work information and to outline the common princi- is done and recovery plans are made. The ples that apply to all recovery undertakings. strategic importance of alternative routes, such as • A strong lead from central government is Transmission Gully, and alternative sources of required to promote planning for recovery and to supply needs to be emphasised. communicate what is expected of all sectors of • Procedures for planning consent and the issue of the community. building permits would need to be streamlined to enable things to happen. To do this, and otherwise expedite reconstruction, laws would need to be changed. It seems sensible to legislate now for the post-disaster situation, so that it can swing into effect immediately. Zones that the council would not want people to rebuild on could also be designated now. • Cost implications of the Wellington quake, including costs of business interruption and indirect costs, would have drastic repercussions for the nation. These costs will impact directly on local businesses and local government, and the reduction in money supply will flow on to central government by the greatly reduced tax take from families and businesses struggling to survive through the recovery period. The challenge is for organisations to have thought about this in advance, to have contingency plans in place to enable them to continue to operate and to have identified sources of finance for recovery. • There are several things you can do now to plan to recover your business operation. Firstly, make sure that you are in a safe, strong building, i.e. it is well-designed to code. Make sure the providers have a good lifelines restoration plan. Set up a management contract beforehand with a major construction firm to come in promptly to help get you up and running again. • The role of the private sector becomes dominant in the reconstruction of devastated cities. Home- owners, the insurance industry, and owners of buildings and businesses will undertake their own reconstruction. Much can be done in advance to ensure that they can work effectively to restore normalcy to the city. • It is costly and unnecessary for any country to ignore the knowledge of the many people who have a wealth of experience of disasters overseas, and it is costly and unnecessary for each local authority to invent its own recovery plan. Why reinvent the wheel in New Zealand, and why do so in each city? It is sensible for all

12 John Roberts

Organisation, Government and Legislation

13 Wellington After the Quake

14 John Roberts

The significance of Wellington being the capital in a disaster

John Roberts

Professor Emeritus, Victoria University of Wellington

The premise is that a highly destructive earthquake centred on a major area of population would present severe problems of political management. Larger societies with greater economic resources can concentrate immediate rescue and relief from unaffected areas. A thinly populated, highly urbanised society like New Zealand would suffer the consequences of this paradox. This suggests that central government will be the prime mover and that existing emergency laws and strategies should be reviewed in the light of recent international discussion and experience.

Wellington represents a worst-case scenario and can be studied with profit in both the regional and national interest. It also draws attention to a major problem: the policy-makers operating under current arrangements in conditions of maximum stress have to respond to the emergency and, at the same time, maintain the economic and political stability of the whole polity. A wider review of the options might suggest a more appropriate location of political authority and the creation of institutions better equipped for the task.

Introduction asts for scientific knowledge — The Royal Society (of which Newton was a founding member) — gave The process by which we come to understand the immense impetus to the study of our terrestrial forces holding our habitat in precarious balance environment, including an accurate location and comprises a complex of observation, speculation and description of the land the Dutch had provisionally resolution. Generally speaking, the participants and named New Zealand. Einstein, in his enquiries into their theories are largely unknown to the world the fundamental nature of energy, unlocked a outside their academic or other professional circles. conceptual door to unparalleled mass destruction. Advances in knowledge are proposed, tested and confirmed by repeated enquiry, challenge and No one questions the influence upon the future for response. Progress is recorded in the professional humanity in these great moments of intellectual journals, but the wider world of the intellect is clarification and liberation from ignorance. There minimally affected. Very occasionally, a great mind, are two important points. First, the principles behind operating at levels of hypothesis beyond the immedi- these great leaps were sufficiently general to engage ate grasp of his contemporaries, alters the way we lay interest and, secondly, the explanatory power think about fundamental forces. Once this new inherent in the fundamental theory has grown with proposition is assimilated — often after prolonged its application to phenomena. debate — it is possible to go forward from the secure base of testable, explanatory theory. When While no one would argue that Alfred Wegener had this happens, the world of knowledge adjusts an influence upon the world of the intellect compa- accordingly and, slowly but surely, a new orthodoxy rable to that of Newton and Einstein, his theory of prevails wherever disciplined intellectual exchanges “continental drift” is a startling exercise in scientific govern outcomes. intuition. Wegener, a German physicist of many interests (and one of those rare minds willing to A very few rewrite not only our assumptions about think outwards from disciplinary constraints), the universe but also the very techniques of thinking offered an explanation for the uneven distribution of about its dynamics. In this way, they make us both most earthquakes across the terrestrial sphere. more subject to its disciplines and more empowered Wegener’s proposals have led to suggestions that to make them serve our ends. This operates at every earthquakes would be likely to occur more fre- level. Newton, in devising a universal theory to quently at the interacting edges of vast, slowly explain the movement of extraterrestrial bodies, moving plates, whose tensions are relieved by opened the way to more sophisticated techniques of sudden rupture. This provides the energy that we navigation. A government department — the experience as ground shaking and failure. Now that Admiralty — in association with a body of enthusi-

15 Wellington After the Quake these boundaries have been identified, it is possible The issue of control to propose: One may argue that the least equivocal duty of the •with useful accuracy, where earthquakes are state, next to the maintenance of territorial integrity, likely to happen; is the protection of the citizen from the effects of natural disasters and the rescue and recovery of •with less certainty, the energy they are likely to those injured or impoverished. This factor is always release; and in dramatic evidence in the aftermath of a disaster, •with significant uncertainty, the moment at and it is reasonable to judge the prudence and which the earthquake will occur. foresight of any government by the way it prepares for and deals with the problem. Certainly, a state Information is being collected with increasing without comprehensive, widely advertised, regularly volume and reliability as seismological records are tested and constantly updated programmes of civil accumulated by national and international agencies defence has failed one of the crucial tests of civilisa- (Stevens, 1980). tion. Yet it would be bold to claim that, when an actual event occurs, the civil defence strategies of One consequence of this research has been the hope most states cope with uniform efficiency. that information could be interpreted to predict the moment when the earthquake might occur with Any judgement on this issue is beset with variables sufficient accuracy to reduce damage to persons and in wealth, social cohesion, physical realities, the property. After attending a number of meetings held human and technical resources required, and the to discuss this proposition, and after much consulta- responsiveness of the chain of political command. It tion of the literature, I came to the conclusion that is important that uneven response should be reduced accurate prediction is nowhere in sight. If it did as far as possible, and international agencies at prove to be practicable, there is reason to believe government and professional level have done much that, in many respects, a prediction of an earthquake to draw the lessons from past events, subject them to might be worse for the community than an earth- evaluation and debate, and publish the results in quake itself. I see no useful purpose in committing widely distributed journals. Among other things, this public resources to the development of accurate promotes participation across international bounda- prediction or in devising public policy for reaction to ries and the growth in expertise. Civil defence has predictions. become a major world issue of high political significance. It is worth recording that a Civil Defence Nonetheless, it is my belief that we have moved into Review Panel reporting to the Minister of Civil a new era as a result of improvement in the relation- Defence stated that it was: ship between responsible political authorities and the practitioners of earthquake science and technology. surprised by the volume and encouraged by As records accumulate, analysis will identify the the quality of written submissions (148) areas vulnerable to destructive shaking and land-use received, and by the level of participation at policies will be devised to minimise hazards to both meetings that we held throughout New persons and property. The programmes for these Zealand. projects are under way throughout the world and (Civil Defence Review Panel, 1992) must stand among the most encouraging examples of rational international cooperation. For example, let Despite this reinforcement of the political signifi- me cite the decision of the United Nations General cance of civil defence, there are inherent problems in Assembly to adopt the 1990s as the International assigning action to particular authorities. The Decade for Natural Disaster Reduction (UN General Review Panel discusses the problem of establishing Assembly, 1989). a control process that provides authority appropriate to deal with the emergency without transgressing the To explain this situation, we have to take into principles of an open and responsible society. account not only the advances in earthquake science and technology, but also the peculiar political The problem is simple in principle and its solution problems and strategies they generate. refers to a maxim of English constitutional practice, which requires that the “Queen’s government must be carried on”. This suggests that the appropriate executives must be left to exercise their powers until

16 John Roberts they, or those to whom they are responsible, are performance of a geographically constrained section replaced with procedural propriety. The clearest case of the population. The assumption is that local occurs in the interregnum between defeat in a organisations are in the best position to determine general election and the appointment of a new whether a declaration of a state of emergency should administration properly equipped with ministerial be made and the steps that should be taken to warrants. Despite the loss in the democratic process, counter the emergency. Central agencies may indeed the defeated executive retains the right and duty to play a role in the response and recovery, but they make essential decisions and to accept responsibil- will remain under the direction of the controller, ity, even where they have consulted incoming whose knowledge of the various hazards will be members of the new administration. The difficulties honed by direct experience and by hypotheses that may arise were most clearly demonstrated in the worked out in training exercises. transition of power from National to Labour following the election in 1984 and the concurrent crisis in There is, however, one official exception to this foreign exchange markets. proposition. The motto of the capital of New Zealand is, in the fashion of these nineteenth century The discussion on this issue in the Civil Defence effusions, a Latin assertion that the city owes its pre- review touches on the principles at stake in this eminence to its geographical location (supreme a process. The Review Panel considered the case for situ). Wellington was not the first capital and, if one appointing an elected politician as the “controller takes the regions separately, never the favourite site emergency forces” under the provisions of the Civil for the centre of political power. It is essentially a Defence Act. The proposition was rejected on a compromise built, as it were, around the shores of a number of grounds, the most important being the superb harbour more or less equidistant from the constitutional proposition that emergency forces other major industrial and agricultural nodes. It is, should be responsible to politicians but not com- by any reading of disaster information and analysis, manded by them. The panel explored the analogy the urban area most liable to violent events such as between civil and military defence structures and earthquakes, floods and storms. As a native son and processes, and made the point that, for powerful having experienced two large earthquakes and a constitutional reasons, the politicians should over- storm that destroyed our house, I feel the temptation see, but not manage, the operations of military or to add a little anecdotal support for the “Close Down civil institutions. Paramount among the reasons for Wellington Movement”. However, employing our this is the need to exercise constantly in the process rational faculties rather than our indignation, we can of assembling resources and deploying them to see Wellington as a geographical boon to all New counter hypothetical challenges. In the nature of Zealanders but compromised by exposure to highly things, elected representatives cannot be expected to active geological and meteorological forces. acquire the professional skills appropriate to the task and should not seek direct involvement in the That is why New Zealand governments have operational chain of command. encouraged investigation of techniques to both mitigate the effects of earthquakes and incorporate The civil and military defence authorities also have the advances in public construction projects in the something in common in the manner in which their region. It also explains why a National Contingency services are commissioned by the civilian authori- Plan was approved by the Minister of Civil Defence ties. A state of emergency exists when it is promul- on 7 September 1989 to mitigate the effects of what gated by a public authority invested with the appro- the document terms a “Major Earthquake in the priate statutory power. These range from the central Wellington Area” (Ministry of Civil Defence, 1989). government (in practice, the members of the Cabinet The plan has now been modified by a document acting collectively) through regions and/or unitary dealing with “Planning for Government Continuity” authorities acting in combination according to the (Ministry of Civil Defence, 1994) to be read with the scope of the emergency. The authorities declaring Civil Defence Act 1983. the state of emergency are politically accountable for those members of the community whose lives are The National Contingency Plan acknowledges a “restricted or affected by the declaration” (Civil central truth about New Zealand government Defence Review Panel, 1992, sec 10.009). Most process. The capital of the country is located not events taken to be Civil Defence emergencies only at the node of all major transport services but endanger the lives, social cohesion and economic also the convergence of the principle fault systems

17 Wellington After the Quake along which major earthquakes have occurred in the with the violent antagonisms and historical injustices geological and historic past. The National Contin- of other societies, there is, or has been, little reason gency Plan is no more than a prudent recognition of to expect that central government action to deal with the need to deal with the strain that might distort the a common crisis would meet with obstruction. Until polity as a whole should a disastrous earthquake recently, New Zealand had a simple majority, first- occur in the Wellington Region. past-the-post, single-member constituency process for the election of political representatives. Over the Clearly, the growing importance of civil defence in years, this proved to be extraordinarily stable. The the complex of political responsibility stems largely leading parties commonly commanded a majority of from the outcome of energetic scientific and techno- seats in reasonably equal alternation and could form logical enquiries into earthquake and other natural a stable government lasting at least until the next phenomena and the means available to evade and general election. Coalitions were rare. counter their potential for disrupting social process. We need to examine the political process itself to see The current Government will be the last constituted how it responds to the obligations imposed by these by this process, since New Zealand has adopted a enquiries. proportional system of voting, which is likely to increase the number of successful factions in the It seems reasonable to suggest that the structure of legislature and lead to arrangements to sustain the government should encourage rational and effective majority acquired by coalition governments. At the programmes. Reaction to the threat of earthquakes same time, Maori are bringing pressure to bear on must be rooted in intelligent and sustained interac- government to redress the effect of racial oppres- tion between those acting with public authority and sion. While Maori would not obstruct programmes the ordinary citizen. With one important exception, to counter the devastation of earthquakes, they may most people seem to be generally convinced that very well be suspicious of radical constitutional politicians are motivated, for whatever reasons, by departures with implications for administration of benevolent concern for the welfare of the citizen. land. (The exception may be found in irreconcilable positions taken up on the questions raised by the On balance, it is probable that citizens accept the Treaty of Waitangi, but these do not seem to trench need for a detailed but flexible plan to allow public upon issues of public safety.) Despite robust con- authority to deal with an earthquake disaster in flict, there is effective communication between Wellington, not only because statistics and earth- citizens and officials and every reason to expect quake science lead to this conclusion, but also willing cooperation. because a large-magnitude earthquake in Wellington is likely to have a more devastating effect upon This does not reflect some innate virtue in the citizen normal social and economic life than any other or society, although it is true that constitutional conceivable disaster. I have referred above to the principles are elegantly spare. It might well be National Contingency Plan. This indicates the argued, indeed, that they are all too uncomplicated direction in which official thought is moving. and deficient in clear rules to restrain the power of the political executive. Above all, there is no second Maintenance of government continuity tier of government capable of challenging the power flowing from the dual control of the central execu- The studies undertaken conclude that a major tive and the legislature. New Zealand is a unitary earthquake in the Wellington region would cause state of radical character and there is no jurisdiction many casualties, disrupt all reticulated services, extended to subordinate local authorities to chal- damage all transport facilities and halt for varying lenge the centre at the ballot box and through the times all services within the community infrastruc- courts. In this respect, the New Zealand procedures ture. From a national perspective, central govern- differ from federal states such as India, Germany, ment functions would be jeopardised, an interna- Canada and the United States with their explicit tional economic crisis might arise, vital national assignment of constitutional powers and roles. transport exchanges would be severely hampered, business and industry would be severely disrupted, Moreover, unitary politics seems to match the tourism affected and stress would extend far beyond uniform character of the society. There is an un- the boundaries of the Wellington region. solved racial problem, of course, but in comparison

18 John Roberts

The question of government continuity is high in the •Office of the Clerk of the House of Representa- order of priorities, given the unusual susceptibility tives; of the central government infrastructure. The • Parliamentary Service; National Contingency Plan suggests that: • Department of the Prime Minister and Cabinet; The preservation of the executive, legislative and and judicial arms of government is critical in order to: • Solicitor General.

1. preserve the sovereignty of the nation; The document makes it clear that, in the event of 2. demonstrate that the democratically such a transfer, only essential activities would be elected government is continuing its contemplated while rescue operations continued. In function of governing the country; and the nature of things, however, activity would certainly expand with the exigencies of the recovery 3. respond at that level to the extra demands phase until the question of the permanent location of occasioned by the earthquake event. the capital arose. This, in turn, would raise the (Ministry of Civil Defence, 1989, p. 8) question of a rational policy response to the earthquake threat in the Wellington region. This an interesting development because it poses a question that may arise in relation to a number of There is no doubt that the country is lucky to have a capital cities as well as Wellington. To argue the natural meeting place near to the geographical centre propositions of the contingency plan a little further, of the country. It is also fortunate that a magnificent we may accept, especially in these harsh days harbour supports the commercial, agricultural and dominated by competitive market behaviour, that manufacturing enterprise of the region and the two factors will determine the speed of recovery. country at large. No matter how pervasive the The first will be the ability to assess the cost arising earthquake threat, these advantages will sustain a from a major earthquake and the second to propose lively community on the shores of Cook Strait. how this may be met by evolving a credible plan Other commercial ventures and their employees will devoted to a process of recovery and, beyond have to assess the risk of remaining in Wellington recovery, expansion opportunities. It may well be when the damage reports of the next large earth- sensible in a case such as Wellington’s to plan for quake have been studied. So far as the public sector the permanent transfer of government to a new goes, the equation is different. There is no good centre. The need for a temporary shift in the earth- argument for maintaining the capital in a place at quake aftermath is raised in government planning risk of widespread destruction when there are viable documents in considering what is called “the and economically defensible alternatives. In the severest situations” when: document “Planning for Government Continuity”, it ... accommodation in Wellington will be is suggested that: uninhabitable for an extended period, Palmerston North or Auckland are the cities communications will be unavailable, there for the Government to relocate to, as they will be the risk of physical danger to senior have good accommodation and communica- politicians and officials, and the task of tions. responding to the event and recovering from (Ministry of Civil Defence, 1994, it will be hindered rather than assisted by the annex B-4, para 18) continued presence of the Government. (Ministry of Civil Defence, 1994, Although this is intended to apply only for the annex B-1, para 4) duration of the emergency, it would represent an upheaval in the relationship between the government This document proposes that the following agencies and the citizen and would only occur in extreme or elements of them should be required to shift to circumstances. At the lowest level, it might be support government operations: regarded as desertion in the face of the enemy. • Cabinet Office; While it is true that the Civil Defence Plan transfers •Minister’s Offices and Ministerial Services; the emergency powers to officials rather than politicians, this makes less difference than appears at

19 Wellington After the Quake first sight. Politicians rarely have executive control North, a thriving market town on a river plain with over the delivery of services. Their function is to the advantage of a university and thus an eager band determine what is to be done, provide the resources of potential consultants. A proposal to shift the and delegate action to the responsible officials. Civil capital to Palmerston North following a large defence differs on two counts. First, it is expected to earthquake would be an instructive and, possibly, a react immediately in accordance with an existing useful project for community planners. There is, of plan about which the central government will know course, a nearby precedent complete, if not replete, little and understand less. The possibility of conflict with tertiary institutions and a growing reputation as between the two levels arises, where conflict would a civilised place to be. Canberra has to work within a be undesirable, to put it mildly. A strong case for federal structure, but there seems no obvious reason relocation fully argued as an option in certain cases why the precedent could not be adapted to a West- would need to be heard through the parliamentary minster-style unitary state. process and the principles incorporated in legislation. The present status of the relocation policy is Conclusions not sufficiently authoritative in my opinion. No doubt some of those who live outside Wellington A more emphatic statement of what is needed to are amused, some faintly irritated and some appalled counter the effect of a large-scale disaster appears in by this cavalier shuffling of urban destinies. I dare the “National Contingency Plan (for a) Major not speak for those who own property in the city. I Earthquake in the Wellington Area” approved on 7 can only appeal to your forbearance and restate the September 1989 and referred to above. The line of point already made at the start. reasoning and realistic assessment of the policy objectives provides a model for general argument The best information available to me suggests that about the government’s obligation to the citizens and Wellington is likely to experience severe earth- steady iteration of the doctrine through critical quakes. My lay interpretation of the information review along with progressive review of resources appears to be confirmed by such of the scientific required to deal successfully with the phases of information as I have been able to comprehend. recovery. Wellington’s seismic history and strategic Sober bureaucrats charged with advising political significance might be employed as a credible “worst leaders warn that extensive preparations are neces- case” scenario. The contingency plan accepts this. sary to deal with the threat of earthquake destruc- This does not assume that relocation of the govern- tion. The politicians have accepted that Wellington ment is unavoidable, but, if the preservation of the is sufficiently vulnerable to warrant a plan to remove government has become an issue, it seems that the key elements of the central executive from Welling- destruction in Wellington would already have ton to ensure continuity of legitimate political reached the point where that option would have to be authority following a destructive event in the seriously considered. The National Contingency Wellington region. Plan does not raise the issue of Wellington’s long- term vulnerability, but this would have to be as- The contingency plans go almost, but not quite, to sessed as suggested above. The central location is the point of permanent removal of the central now of marginal importance. As an administrative government, depending upon the scale of destruction and commercial centre, Wellington has a substantial in Wellington. If that point were to be reached, it investment in a built environment, but the recovery would be, in my opinion, irresponsible to restore the phase would become a matter largely for private functions of government to Wellington without a decision-making. A precautionary evacuation of penetrating analysis of the most recent information Wellington would be impossible to argue politically on the cost of recovery. In this process, the fearsome or to justify economically. But one can look at tragedy suffered by the people of Kobe may have shifting the government functions dispassionately as much to teach the rest of the world. one rational solution to the exigencies of post- earthquake reconstruction. The logical centre would be Auckland, but it seems likely that the rest of the country would be uneasy at this expression of private and public oligopoly. The alternative, temporary and presumably seismically stable centre proposed by the official documents is Palmerston

20 John Roberts

References Civil Defence Review Panel. 1992. Civil Defence Review Report.

Ministry of Civil Defence. 1989. National Contin- gency Plan: Major Earthquake in the Wellington Area.

Ministry of Civil Defence. 1994. Planning for Government Continuity: Guidelines and Considera- tions.

Stevens, Graeme. 1980. New Zealand Adrift. Wellington: A H and A W Reed.

United Nations General Assembly. 1989. Resolution 44.236.

21 Wellington After the Quake

22 Jim Rolfe and Neil Britton

Organisation, government and legislation: Who coordinates recovery?

Jim Rolfe

Victoria University of Wellington and Neil R Britton

Wellington Emergency Management Office, Wellington City Council

A serious earthquake in Wellington will cause major and long-term damage to the city and its lifelines. There will have to be a coordinated effort to ensure that the city recovers as effectively and as efficiently as possible. There are national, regional and territorial jurisdictions and interests involved. Coordination of these interests will be a major concern of the recovery effort. Formal responsibilities for recovery coordination are defined in the Civil Defence Act 1983. Practice has evolved away from statutory procedures, and central recovery efforts predominate in current planning programmes. These are now generally coordinated through the Department of the Prime Minister and Cabinet, although their design is based on the country’s recent history of rural-based, low-magnitude, low- scope impacts. At the same time, attention has focused on local government developments, such as the recovery planning process undertaken in Wellington city. Recovery should be the initial responsibility of the affected community. Central government should become involved certainly, but not as the lead actor.

Introduction flooding in Kaikoura (1993) and Milford (1994), the flood-induced break of effluent mains in Kilbirnie, New Zealand has been spared the recent agonies that Wellington (1994), or the bushfires in Napier (1994) natural disaster has wrought on other countries, such and Eastbourne, Wellington (1995), contemporary as bushfires in Australia, floods in Europe, volcanic New Zealanders’ experience with disaster is rela- eruptions in Japan and the Philippines, or earth- tively confined in terms of three important criteria: quakes and their consequent secondary impacts in India, USA and Japan. For the record, it should be •the magnitude and scope of hazard impact; noted that New Zealand is prone to all these natural •the location of impact (the majority have oc- hazard agents. That the country has not had a major curred in rural or semi-rural settings); and natural disaster since 1931 is, to many knowledgeable observers, a surprise. Nevertheless, it is just as •the degree of damage and disruption created by well. It has to be said that our current state of the impact agent. response and recovery planning is, in many areas, governed as much by good luck as by any deliberate What our recent past tends to hide, however, is that intention. Central government’s decision to review the effects witnessed in overseas events such as the the coordination of disaster emergency services is Hanshin (Kobe) earthquake in January 1995, the the latest in a string of symptoms that points the way Northridge earthquake in January 1994, the Guam that the nation’s counter-disaster structure requires a earthquake in August 1993, the Hokkaido-nanssei- major overhaul. Certainly, the proficiency of New oki earthquake in July 1993, the Newcastle earth- Zealand’s disaster management system is not as quake of December 1989 or the Loma Prieta earth- good as it should — or could — be. quake in November 1989 can easily be replicated here. Six important commonalities warrant particular Nevertheless, our current state of preparedness attention: reflects our relatively limited experience. Even if we •they all impacted on urban settings; include recent local events such as the earthquake in Gisborne (1993) or in the Southern Alps (1994), •there were multiple impact sites;

23 Wellington After the Quake

•widespread property damage, injury and (in which by their nature focus on the longer rather than some cases) significant loss of human life the shorter term. resulted; Recovery is a time for repair and reconstruction of •utility lifelines were dislocated to the extent that the physical infrastructure following disaster. It is a ongoing social routines were severely disrupted; process of healing for communities and their • extensive disaster recovery operations were residents (LaPlante, 1988). There are, therefore, two necessary; and components to recovery: the work that must be done and the process and organisation to ensure the work •different levels of government were involved in is done. The theme of this paper is the organisation the recovery process. and obligations for recovery, rather than the detail of There are two important variables in any disaster what has to be done. equation. Firstly, and most significantly, disaster is a Recovery cannot be examined in isolation. Both the local problem. On the whole, it is the local commu- process and the quality of the recovery effort are nity that is impacted; hence, disaster impact and its likely to be affected by and respond to previous consequences are major local issues. Secondly, preparations for, and the response to, the emergency. disaster management requires a specific type of The different facets of emergency management are social crisis intervention process in which mitiga- interrelated, and the effectiveness of one affects and tion, preparedness, response and recovery are is affected by the others. The importance of under- necessarily inter-jurisdictional in nature. The standing disaster pre-conditions is paramount management of any large-scale disaster is not only (Britton, 1990). There is a common experience that an inter-organisational undertaking but, by its very disaster preparedness networks are complex and, as nature, is also inter-governmental (Perry and Nigg, Gillespie et al. (1993) remind us, there is often a 1988). In particular, responding to and recovering fragmented dispersion of responsibilities across a from disaster requires a series of hierarchical and variety of agencies. horizontal arrangements and responsibilities. To the extent that these different organisational and politi- Recovery efforts must, therefore, concentrate on cal units can agree on what needs to be done, what identifying the needs of the affected community and actions are important, who should be undertaking be informed by a vision of the ultimate size and them, how it will be funded, what resources are to be shape of the community. This must be the primary committed to the process and who should be coordi- task of the level of government responsible for the nating them, a system of disaster management can community. Local government is responsible for be developed. At the root of all this is coordination managing the disaster event and the recovery (Britton, 1990). While all three levels of New process. This is the interpretation most metropolitan Zealand government — local, regional and central locations have placed on the Civil Defence Act, — are necessary for effective disaster response, the although past practice in New Zealand has been for central/local connection will be the most significant central government direction. As explained earlier, in the context of a recovery process in post-earth- this divergence is partially explained by the low- quake Wellington city. magnitude, low-impact, rural-based character of recent hazard impacts in New Zealand. With this The reality of disaster experience as a guide for developing recovery Disaster policy-making takes place in two political procedures, it is obvious that a major earthquake worlds. The first is that of “normal” politics, where disaster in Wellington will be unprecedented and disaster policies have low political salience and are one in which past practices are unlikely to be of relegated to the backwaters. The second is the much assistance. “active” world of policy made after the event and The fact that there will be more than one level of that features high media interest and political desire government with a legitimate interest in elements of to be seen to be doing something (May, 1988). the recovery does pose problems. Roberts (this However, the danger is that policy will be skewed conference), for instance, argues that in the New towards the immediate and visible rather than Zealand context, central government will be the perhaps the more important long-term issues. This is prime mover in the recovery process. If this were to a distinct possibility for recovery programmes, be so, different concerns from those regarded as

24 Jim Rolfe and Neil Britton important by the local community are likely to be •other private businesses; and given priority. It may be that Roberts is basing his • not least, individual citizens. assumptions on past practices rather than current emergency management developments at local Indirect effects would spread much further. If the government level. When central government had a government decided that it needed to be relocated, monopoly on major resources, it was more likely albeit temporarily, at least one other city outside the that it could play an influential role; this, however, is immediate region would be affected (it is, however, not the case in New Zealand today. Essential not likely that central government would abandon services, for example, are often no longer the the city and establish a permanent base elsewhere). preserve of public agencies. With this diminution, If there was any evacuation or refugee problem, greater responsibility has fallen on local and regional many other cities would be affected. Any interna- governments to develop contracts with private tional aid effort would involve central government agencies to ensure resource availability. as well as other cities. These issues are not central to the immediate recovery effort, but they may affect it. In Wellington’s case, the problems of inter-governmental coordination may be exacerbated by its The weight of informed opinion, supported by special position. As the capital city, the forum of empirical evidence, seems to accept that recovery is political interests and the financial centre, it is best managed at the local level, but that there is a inevitable that Wellington will attract the attention need for strong cooperation and coordination among of a range of players and special interests that might and within levels of government (Hy and Waugh, not otherwise be concerned with the recovery 1990). It is local government that typically must process. It is possible that the special position will finance much of the early response and relief as well translate into special processes for recovery. That as some portion of later recovery and reconstruction. could be useful; it is more likely to be counter- The need to consider that local government’s fiscal productive. ability is underscored by research that:

Management of recovery may well involve an disasters may have important long-term element of competition between levels of govern- economic and fiscal impacts on selected ment for control of the process. Full local control communities as well as families and over recovery seems likely if the local council can individuals ... demonstrate that it either has the resources and (LaPlante, 1988) processes in place or has a set of policies and procedures that have been agreed by relevant interest LaPlante (1988) shows that local government’s groups and that can be implemented without abnor- response to disaster can play an important role in mal central assistance. Local government may not shaping the path of recovery at both the community have full control over essential resources for the and household levels. Yet local governments are effective management of disaster recovery. How- often the forgotten partners in disaster recovery, a ever, it can, and should, have policy procedures and process that itself is very often neglected in favour guidelines that can steer the recovery process of the apparently more “obvious” need to ensure through its various manifestations. effective impact response actions are in place.

The recovery problem A fully functioning emergency management system thus requires that governments possess the capabil- The effects of a major earthquake will spread much ity: wider than the immediate area of destruction. An to understand (1) the total system, (2) the earthquake in greater Wellington would directly uses to which the products of the efforts of affect: various professionals will be put, (3) the • central government; potential linkages between the activities of •regional government; various professional specialists, and (4) the specifications for output and language which •three or four city and district governments; are compatible with the need and under- •private agencies providing what many regard as standing of others within the total system. essential services such as rail and telephone; (Petak, 1985, p.6)

25 Wellington After the Quake

Most states recognise these requirements, in theory for improved efficiency, equity and amenity. If Haas at least, and have developed recovery policies to is correct, then the problems are largely technocratic some. Most attempt to apportion responsibilities and solvable by the application of technocratic between local, regional (or state in the case of solutions. federal jurisdictions) and national levels of government so that appropriate decisions can be made by But other researchers have determined that recovery the appropriate level of government. The approach is likely to be much more complex than this san- adopted depends to a large extent upon the political guine view. Rubin et al. (1985, cited in Bolin, 1994) culture of the particular state, but the common theme found examples of confusing and simultaneous is of local responsibility supported, as necessary, by activity. Quarantelli (1989, cited in Bolin, 1994) higher levels of government. expands this and argues that recovery is a heteroge- neous and conflictual process. Recovery is a com- US policy dealing with recovery requires all levels plex social process, dependent both on the material of government that receive federal disaster assist- conditions rendered by the disaster and social forces ance to prepare a plan for averting recurrence of the existing in the community both before and after the loss (May and Williams, 1986). It is clear that in the disaster. US, state and local governments interpret and organise disaster policy. There is an intergovern- Recovery relies, it seems, on more than legislation mental bargaining model that best describes the and aid. Political and cultural conflicts over recovery interaction of national, state and local governments plans and a lack of organisational capacity at the (Stratton, 1989). But state and local governments local level can severely inhibit the pace of recon- may not necessarily have the capacity to manage struction of earthquakes with regional impacts. Into recovery effectively. Waugh (1990) observes that this mix must be added the emergent local recovery while it is clear that many states and localities do effort: it should not be forgotten that recovery and have the political, administrative and economic reconstruction actions can be dominated by the wherewithal to manage emergency programmes volunteer effort if the victim population perceive a effectively, many others suffer from fiscal stress and lack of organised response (Wenger, 1991). a reluctance to become involved in wider policy activities. Bolin (1994) described the different interests involved in recovery following an earthquake in Australia, in contrast, has had a tendency not to plan Whittier, east of Los Angeles (population 75,000) for disaster recovery at the national level. Recovery and their sometimes conflicting objectives. The has been considered the preserve of state and local experience there was that many interests are in- disaster management structures (Britton and Wetten- volved in recovery. Individual victims were inter- hall, 1990). Australian authorities are now develop- ested in rebuilding their homes and getting over the ing concepts that reject the “conventional” piece- emotional disturbance of the earthquake. Business meal approach to disaster management based on interests and the city government viewed the discrete and relatively independent political units earthquake as an opportunity for the redevelopment acting in isolation. Instead, they are recognising the and “revitalisation” of the uptown area, while other interdependence of those affected by disaster and are groups moved almost immediately to prevent the adopting more coordinated and internally cohesive razing of buildings of significant historic interest. strategies in which emergency functions are appor- tioned through inter-organisational consensus and A key feature of the recovery in Whittier was that cooperation between levels of government and the the speed of physical recovery was subordinated to various emergency agencies (Britton, 1991). the time needed for comprehensive planning of the style, character and land use patterns of the uptown These changes in practical emergency management area. This trade-off of speed against planning was a reflect, and are reflected by, new theoretical insights specific result of the systems and requirements of into the nature of the problem. Nearly 20 years ago, government in Whittier and, not incidentally, of the Haas and others (1977) described recovery as level of pre-impact planning for disaster that had “ordered, knowable and predictable”. The central been undertaken by the local government. The pace issues were, in their view, value choices that gave of reconstruction in Whittier was affected by a varying emphasis to the early return to normalcy, the number of factors. Key elements included: reduction of future vulnerability, or to opportunities

26 Jim Rolfe and Neil Britton

•the lack of long-range planning prior to the It is not particularly difficult to recognise the issues. earthquake; What is difficult is to get decisions made within a reasonable time-frame. For that reason, the more that •the time necessary to secure funding from recovery planning can be done in advance, even if government sources to pay for the reconstruc- only in principle, the more efficient the process is tion; likely to be. •the time required to develop a comprehensive, integrated master-plan for the city; There are difficult questions for policy makers as they determine the appropriate roles for different •a lengthy process to get building permits proc- levels of government and make decisions that will essed and approved; benefit some communities and individuals and act to • litigation by historic and preservation groups to the detriment of others. Petak (1985) describes a prevent the demolition of buildings; situation in which: •shortage of staff in city government, which projects intended to provide an engineered slowed building inspections and review of reduction in the future magnitude of hazard- reconstruction plans; ous events may involve greater economic cost •lawsuits against the city by businesses claiming than calculable monetary benefits. They may that the city caused them losses; and extend benefits to one group but impose costs on still other groups. Regulatory policies •a shortage of builders and materials. targeted on reducing the vulnerability of buildings and community infrastructure ... By contrast, Geipel (1982) described the 1976 Friuli may similarly result in amortized costs which earthquake. It affected a population of some 500,000 exceed the economically calculable future 2 over an area of 4800 km . The main concern for the streams of benefits resulting from the regula- residents was to begin reconstruction forthwith. tions. They were not so interested in long-range planning by any government at any level because that could Mushkatel and Weschler (1985) show that recovery leave them in more or less permanent temporary has both a technical and political dimension in accommodation. The Friuli case emphasised the which the public policy processes of formulating, importance of taking a regional — even an inter- adopting, implementing and evaluating policy are regional — perspective. Earthquakes, especially, do linked with the emergency management processes, not necessarily strike a single point. The Friuli in this case of recovery. They describe a matrix of earthquake affected a wide area. Decision makers inter-governmental processes in which a major task had to solve problems of social policy with all the is to encourage governments at all levels to join in implications for equity. integrating the emergency management system into the overall inter-governmental system. Haas et al. (1977) discuss the basic public policy issues: Extending this, Parker (1992) identifies three • Should normal as opposed to extraordinary principal sets of influences: institutional arrange- decision making mechanisms be used? ments and policies, the political economy and the technological environment. Institutional arrange- • Should there be changes in land use? ments include legislation, organisational arrange- • Should a concentrated effort be made to make ments, attitudes and sub-cultures, financial arrange- the city more efficient and more attractive? ments and provision of the infrastructure behind the process (Parker, 1992). They both reflect and • Should there be compensation or special finan- generate policies. They all determine how agencies cial assistance for private property loss? respond to particular tasks. Institutions and policies • How should personal or family problems be are designed to make effective hazard management handled? possible, but institutional inadequacies impede the • How should increased local expenditure be process and may act in a negative or disintegrative financed? manner. The basic intent of policies emphasising government assistance in the post-disaster period is to lift the excess burden of environmental risk from

27 Wellington After the Quake the shoulders of the individuals and communities segments of the impacted community, especially if it that have assumed it and spread the risk more or less was deemed that relief and/or recovery measures are evenly over the entire taxpaying population (Wright not “progressing fast enough”. This perceived and Rossi, 1981; NZ Government, 1987). problem is one of the most invidious to overcome and, ironically, is one of the most likely to occur. It The national system is certainly the most difficult to plan around, mainly because popular judgment tends to go against the As with most jurisdictions, New Zealand has defined emergency response system once post-impact rescue its emergency management procedures in legislation and relief phases are over. There is a pervading view and defined the relative roles and responsibilities of that disaster recovery should be achieved quickly. the different levels of government. The legislation When it is found to be otherwise, public disquiet sets has, however, been overtaken by practical develop- in. As dissatisfaction grows, so does the compulsion ments to the extent that there is some scope for of higher levels of government to step in and confusion as different actors work either from the “remedy” the situation. authority of the legislation or from the practical policies developed over the last decade. Given a strict reading of the Act, a disaster recovery coordinator has a focus purely on restoring services The Civil Defence Act 1983 defines civil defence or amenities, rather than on the wider recovery (i.e. emergency management), in summary, as those matters that would be necessary given our initial measures “to prevent, reduce, or overcome the definition of recovery. A coordinator was appointed effects” of a range of natural and technological in 1987 following Cyclone Bola in the sparsely hazards. The Ministry of Civil Defence is estab- populated East Coast area of the North Island. His lished, and regional councils and territorial (i.e. brief in that case was to coordinate all government local) authorities are required to plan for emergency activity and assistance not directly related to the management. A state of civil defence emergency immediate response to the emergency and to the may be declared by any of the three levels of preservation of life or property. In practice, there is a government, depending on circumstances pertaining fine line between these functions and between at the time. Such a declaration makes available a questions of the immediate restoration of services range of emergency powers to those authorities. and the longer-term size and shape of the community. If a state of civil defence emergency is in force and the Minister of Civil Defence (normally the Minister A commissioner for disaster recovery may be of Internal Affairs) is satisfied that the appropriate appointed under the authority of S692 of the Local level of regional or territorial government will not be Government Act 1974. This commissioner, too, has able to coordinate the resources necessary to restore a focus on the immediate needs of the community services, amenities and habitation, then a disaster rather than on wider recovery matters dealing with recovery coordinator may be appointed using the the long-term needs of the community. authority of S69 of the Civil Defence Act. The coordinator has responsibility to the Civil Defence The government has, since 1987, had a formal Commissioner (an employee of the Ministry of Civil policy relating to recovery. This is the recovery plan Defence) for the direction and coordination of the for natural disasters and emergencies administered use of all resources and services made available by a by the Department of the Prime Minister and range of agencies, and he may exercise all the Cabinet (DPMC, 1987). The recovery plan has been powers and duties of a regional or local (civil amended several times since 1987 and has been defence) controller. endorsed as the continuing basis of policy actions by successive governments since 1987. It has a wider It is necessary to note that there is no test of “satis- scope for recovery than the legislation. It is con- faction” described, but presumably it would include cerned with longer-term issues rather than the day- questions such as the degree of prior preparation to-day measures that may be needed to cope with the exercised by the local authority, whether there was a effects of the disaster, and it is primarily concerned viable emergency plan in place and whether the with defining and limiting central government’s local authorities requested assistance. It is also liability to local communities in case of disaster. probable that “satisfaction” could be determined by the amount, or source, of dissatisfaction from

28 Jim Rolfe and Neil Britton

The recovery plan gives direct responsibility for this option, the person appointed to undertake these recovery matters to the affected community. In tasks is known as a disaster recovery manager. Some essence, then, its philosophy is that of an at-call local governments, and Wellington city is one, have backstop, designed to supplement local efforts but used this opening to develop and implement disaster not to replace them. Hence, current practice is recovery procedures. moving to disaster recovery being a local responsibility. However, should a local government not be While the options are available to local government, able to follow through its post-impact obligations, the point to note is that, should the impact commu- then central government will do so. nity not have sufficient pre-planning contingencies that provide an appropriate framework for recovery, The recovery plan also describes a process for central government will intervene. If central politi- appointing a disaster recovery coordinator, who in cians are not convinced that a viable recovery this case is a non-statutory authority reporting to the management process exists, they will attempt to Department of the Prime Minister and Cabinet, and establish their own. If Wellington is to maintain who acts as the Government’s single point of contact control over its own destiny, it needs to demonstrate in the affected area. Cooperation between this that it has a plan for recovery, one that takes account appointee and the community is not coerced through of the interests of national actors, that it is capable of his statutory powers, but is achieved because, unless managing the recovery process in partnership with cooperation and coordination occur, central govern- the other units of government in the region, and that ment assistance will be harder to get in a wide range it does not have to demand an excessive level of of discretionary areas. assistance from central government.

There are, thus, two central departments with The Wellington system emergency management responsibilities: the Depart- ment of Prime Minister and Cabinet, and the Minis- Wellington has gone a considerable way to achiev- try of Civil Defence. They have a clear understanding all of these requirements (see for instance, Scott, ing of their respective roles, of the ways that legisla- this conference). The recovery problem affects the tion and policy differ, and of the backstop role of different levels of government according to what is central recovery assistance. affected. Five major developments underscore these achievements. The Wellington Earthquake Lifelines Within the context of comprehensive emergency Group (WELG), established in 1993, which operates management, however, the central agencies may not under the auspices of the Wellington Regional be central to the process. The city or district should Council, was set up to coordinate the efforts to attempt to solve its own problems and call in reduce the vulnerability of the capital’s lifelines assistance when and only when that is required. (WELG, 1993, 1994). It comprises representatives Whether this will be the case in practice, though, is of all local governments in the Wellington metro- likely to be because of personal rather than systemic politan area, all major utility and transportation factors. That is, the outcomes rely on the individuals companies and authorities, research organisations involved and the degree of interest they take rather and consulting engineers. than on formal policies and processes. Hence, some scope exists for conflict between central government The need for WELG becomes apparent when the players who wish to exercise the letter of the relationship between ownership and infrastructure is legislation and those who wish to apply “case law” made clear. The main road system is the responsibil- in the form of policy as it is expressed in the recov- ity of a national public agency. Other infrastructural ery plan. utilities are privately owned. Central government will be concerned to ensure that all these parts of the At the same time, Sections 69-72 of the current Civil infrastructure are restored as soon as practicable. Defence Act and Part 2 of the National Civil De- Regional infrastructures are the responsibility of the fence Plan enable steps to be taken by a local regional council. The water system is an example. government to assist community recovery. These Wellington city is, in turn, responsible for its own steps include the appointment of a person to coordi- amenities. nate short- and long-term recovery activities, such as accommodation, building reconstruction and The complex of inter-relationships is well under- economic restoration. If local government chooses stood within the region and is represented by the

29 Wellington After the Quake second major development. In 1994, the Wellington aspects of administrative continuity, the refocusing Basin Forum was established. Proposed and ap- of the council’s strategic direction and recovery proved by the chief executives of Hutt City Council, liaison. These sections of the guide discuss the Kapiti District Council, Porirua City Council, Upper philosophy underlying the council’s approach and Hutt City Council, Wellington City Council and establish responsibilities for action. The council Wellington Regional Council, the forum is an ad hoc emergency strategic plan also designates a senior policy- and decision-making group of senior manag- council officer to be the disaster recovery manager. ers and emergency management officers. The final significant initiative undertaken by Wel- The reason for establishing the forum was to recog- lington city is the appointment of a full-time emer- nise that a large-scale disaster will affect several gency management officer to the position of recov- territorial authorities, and hence preparedness and ery support coordinator. In the New Zealand context, response management actions need to be coordi- this is a unique post. No other local government, or nated between them. One of its objectives is to indeed, no other level of government, has a perma- achieve standardisation in essential emergency nent position directed solely to aspects of disaster management activities. Through the forum, a set of recovery. The recovery support coordinator liaises memoranda of understanding (MOU) have been with both regional and central government agencies, developed between members, predicated on “estab- as well as coordinating a multiplicity of community lishing a common agreement on comprehensive support agencies through the disaster recovery emergency management practices and procedures” planning guide. for the territorial and regional authorities (MOU, 1994). The Wellington system of overall emergency management is described in Britton (1994) and For the purposes of emergency management, the shown diagrammatically in Figure 1. Clearly, forum aims to transcend the political boundaries of Wellington has developed its own set of processes to local governments, creating instead a “supra-city” ensure recovery and it has established institutional within which counter-disaster resources will be links inside its own organisation and external links pooled rather than competed for. For recovery with some of the other levels of government that purposes, the regional council agrees to support and have a legitimate interest in the city’s recovery. enhance territorial authorities in their post-impact needs and to allocate and prioritise resources not The question is, however, are these developments available to territorial authorities. For their part, enough? Are they sufficient for central government territorial authorities have agreed to identify and to be relaxed, or “satisfied”, that Wellington is able develop a disaster recovery process for the local area to manage its own earthquake-induced disaster and integrate and coordinate post-disaster recovery recovery? Are these initiatives acceptable for needs with each other (MOU, 1994). Wellington city to demonstrate to central government that it has a set of policies that have been The third development is the production of a draft agreed by relevant interest groups and that can be recovery planning guide for Wellington city (WCC, implemented without abnormal central government 1994a). The guide describes the city’s disaster assistance? Will these developments be enough to recovery philosophy, its organisation for recovery deter central government from wanting to be the and responsibilities for a number of disaster recov- “prime mover” in the recovery process? These are ery functions. The important philosophical basis questions that only central government can answer, underlying the guide is the recognition that recovery and that answer will probably only be forthcoming occurs most effectively when the community is fully after the event. involved in its own recovery and when recovery issues have been debated and considered prior to If central government did assume the dominant impact (WCC, 1994a). leader role in the recovery process of a post-earthquake Wellington, especially if it decides to do so in The fourth major initiative the city council has a way that goes against the intentions of Wellington undertaken has been the development of a council City Council or its ratepayers, it might wish to take emergency strategic plan to consider the critical heed of lessons learned by the Australian Federal issues related to disaster emergency planning (WCC, Government following the disaster wrought on 1994b). For recovery, the planning guide discusses

30 Jim Rolfe and Neil Britton

Wellington City Council Recovery from a community-wide disaster impact

Disaster impact Central government Wellington City Disaster • Dept of PM and Cabinet (DESC) Readiness •Ministry of Civil Defence (preparedness) Response Recovery Plan Wellington Regional Council • Elected officials Reduction Reduction Disaster Recovery •Management team (prevention) (mitigation) Manager Wellington City Council Recovery • Elected officials Recovery Committee •Management team

Recovery Planning Committee Hazard reduction/mitigation (limiting the magnitude of future impacts) Economic Recovery Social Recovery Physical Recovery •Employment re-establishment •Welfare assistance • Building inspectors • Financial incentives •Emergency shelters • Consents/permits • Business stability • Long-term housing •Moratoriums •Employment creation • Physical health • Reconstruction • Insurance •Mental health • Safety • New economic opportunities • Community outreach • Building services • Recovery assistance centres • Infrastructural replacement/reinstatement • Re-siting

Impact Community

Figure 1: The Wellington system of emergency management (source: Britton, 1994). There is also two-way planning input from the Wellington Basin Forum.

Darwin by tropical Cyclone Tracy, in 1974 (see the desirability for public participation was stressed Britton, 1980; King, 1979). by the Cities Commission, and provisions for participation were incorporated in the Darwin Cyclone Tracy virtually obliterated Darwin on Reconstruction Act 1975. By this time, however, Christmas Eve 1974. Five days after the disaster, the public opposition to “outsiders” had set in and the Australian Prime Minister announced to the Darwin DRC, when it came into being, encountered bitter people that it would rebuild the city. A statutory opposition from residents, the Darwin City Council, authority, the Darwin Reconstruction Committee and the Northern Territory Legislative Assembly. (DRC), was established by the Federal Government with a five-year term to plan, coordinate and under- While one of the aims of the DRC was to implement take reconstruction of the city. An associated aim hazard mitigation measures as well as to rebuild the was to create a safer city from the perspective of the city, opposition to the committee was so great that cyclone threat. Its area of authority was a 40 kilome- few of the proposed land-use changes have been tre radius from the Darwin Post Office. While implemented and many had to be abandoned. enabling legislation was being created, an interim Central government’s intentions were well-meaning, Darwin reconstruction committee (IDRC) was but its capacity to act and its understanding of formed. residents’ desires were limited. That is not a necessary outcome of central intervention. It is a possible The IDRC met on 6 January, 1975 and recom- one. mended that a new planning scheme be prepared to provide a basis for Darwin’s rebuilding. The report Conclusions contained, by implication rather than in detail, considerable potential for land-use change, and it Recovery is a link in a chain of events, which can be appeared, at least to Darwin’s residents, that the helped by carefully planned policy at each stage. At methods by which changes were to be implemented different points throughout the emergency manage- were quite definite. No public consultation took ment cycle, critical decisions are made, whether by place in the design of the recovery plan. However, design or default, that have important consequences

31 Wellington After the Quake for the future of communities and the citizens who developments. Centre for Disaster Management, populate them. It seems that recovery is most likely University of New England, Occasional paper no. 5. to be successful when the local community has control over the speed and direction of the recovery Britton, N R. 1993. “Seismic risk, utility lifeline effort. vulnerability, and hazard mitigation in Wellington”. pp. 115-143 in Catastrophe Insurance for Tomor- There are specific processes in place within Welling- row: Planning for Future Adversities. Eds. N R ton City Council and between the council and its Britton and J Oliver. Proceedings of a seminar neighbouring units of local government to ensure sponsored by Sterling Offices (Australia) Limited. that resources for recovery can be made available and that a sensible set of policies for recovery can be Britton, N R. 1994. “Emergency management and developed. lifeline coordination: Wellington city case-study.” Paper for the 1994 Wellington Earthquake Lifelines The emergency management planning and prepara- Group Workshop on “Lifelines in Wellington: How tion tasks undertaken by Wellington city have been Well Planned is our Response to Earthquakes”. sufficient to satisfy the responsible central govern- Wellington. ment departments that their tasks in a post-impact “maximum credible earthquake” disaster will be Britton, N R and R L Wettenhall. 1990. “Evolution those that support the programmes currently being of a disaster ‘focal point’: Australia’s natural set in train by the city, rather than tasks to compete disasters organisation.” International Journal of with or replace city initiatives. While no recovery Mass Emergencies and Disasters. 8 (3): 237-274. programme will ever be without problems, conflict, competition and upheaval, a framework has been Department of Prime Minister and Cabinet (DPMC). established and a dialogue started with all essential 1987. Recovery Plan: Natural Disasters and Emer- players, including central government. This will gencies Within New Zealand. Wellington: Govern- enable the rebuilding of Wellington to take place in ment Policy Document. an environment of cooperation and coordination. Geipel, R. 1982. Disaster and Reconstruction: The Recovery is a long-term process, all the more so Friuli (Italy) Earthquakes of 1976. Trans. P Wagner. because it is dependent upon pre-impact planning. London: Allen and Unwin. The fact that Wellington city, with the Wellington Gillespie, D F, R A Colignin, S A Murty and M region, has started this process implies that it is in a Rogge. 1993. Partnerships for community prepared- much better position to be in control of its own ness. Program on Environment and Behavior destiny. monograph 54. Institute of Behavioral Science, University of Colorado, Boulder, Colorado. References Bolin, R. 1994. Household and Community Recov- Haas, J, R Kates and M Bowden (eds). 1977. ery After Earthquakes. Institute of Behavioral Reconstruction following Disaster. Cambridge, Science, University of Colorado, Boulder, Colorado. Massachusetts: MIT Press.

Britton, N R. 1980. Darwin’s cyclone ‘Max’: An Hy, R J and W L Waugh. 1990. “The function of exploratory investigation of a natural hazard emergency management.” pp. 11-26 in Handbook of sequence on the development of a disaster subcul- Emergency Management: Programs and Policies ture. Disaster investigation report no. 4, Centre for Dealing with Major Hazards and Disasters. Eds. W Disaster Studies, James Cook University, Towns- L Waugh and R J Hy. Greenwood Press: New York. ville, Queensland. King, S A. 1979. More than meets the eye: Plans for Britton, N R. 1990. “Policy development and social land use change in Darwin after cyclone Tracy. Two crisis administration.” Asian review of public Northern Territory Urban Studies. Bulletin no. 5, administration. 2 (1-2): 74-91. North Australia Research Unit. Australian National University, Darwin, Northern Territory. Britton, N R. 1991. Social crisis contingencies at local and state government levels: Recent Australian LaPlante, J M. 1988. “Recovery following disaster: Policy issues and dimensions.” pp. 217-235 in

32 Jim Rolfe and Neil Britton

Managing Disaster: Strategies and Policy Perspec- Wellington City Council (WCC). 1994a. Disaster tives. Ed. L K Comfort. Durham, North Carolina: Recovery Planning Guide. Draft copy. Wellington: Duke University Press. Wellington City Council.

May, P. 1988. “Disaster recovery and reconstruc- Wellington City Council (WCC). 1994b. An Emer- tion.” pp. 236-254 in Managing Disaster: Strategies gency Strategic Plan for Wellington City Council: A and Policy Perspectives. Ed. L K Comfort. Durham, Planning Guide. Wellington City Council, Welling- North Carolina: Duke University Press. ton.

May, P and W Williams. 1986. Disaster Policy Wellington Earthquake Lifeline Group. 1993. 1993 Implementation: Managing Programs under Shared Report. Wellington: Wellington Regional Council. Governance. New York: Plenum Press. Wellington Earthquake Lifeline Group. 1994. 1994 Memorandum of Understanding (MOU). 1994. Report. Wellington: Wellington Regional Council. Wellington City Council. Wenger, D E. 1991. Emergent and volunteer McKinley, P (ed.). 1990. ‘Historical background’ behaviour during disaster: Research findings and and ‘The structure of government’ in Redistribution planning implications. Hazard Reduction Recovery of Power? Devolution in New Zealand. Wellington: Centre monograph. College of Architecture, Texas Government Print. A&M University.

Mushkatel, A H and L F Weschler. 1985. “Emer- gency management and the intergovernmental system.” Public Administration Review 45 (special issue): 49-63.

Parker, D. 1992. “The mismanagement of hazards.” pp. 3-24 in Hazard Management and Emergency Planning: Perspectives on Britain. Eds. D Parker and J Handmer. London: James and James Science Publishers.

Perry, R W and J M Nigg. 1988. “Emergency preparedness and response planning: An intergovernmental perspective.” In Mental Health Response to Mass Emergencies: Theory and Practice. Ed. M Lystad. New York: Brunner/Mazel.

Petak, W J. 1985. “Emergency management: A challenge for public administration.” Public Admin- istration Review 45 (special issue): 3-7.

Tierney, K J. 1989. “The social and community contexts of disaster.” pp. 11-39 in Psychosocial Aspects of Disaster. Eds. R Gist and B Lubin. New York: John Wiley and Sons.

Waugh, W L. 1990. “Emergency management and state and local government capacity.” In Cities and Disasters: North American Studies in Emergency . Eds. R T Sylves and W L Waugh. Springfield, Illinois: Charles C Thomas.

33 Wellington After the Quake

34 Panel discussion Organisation, government and legislation

Chair: Fran Wilde, Mayor of Wellington Panel: Neil Britton, Chief Advisor, Wellington City Council Emergency Management Office Pat Helm, Policy Advisor, Department of the Prime Minister and Cabinet Margaret Laird, Civil Defence Manager, Wellington Regional Council Graham Miller, Civil Defence Controller, Wellington Regional Council Paul Officer, Director, Ministry of Civil Defence John Roberts, Emeritus Professor, Victoria University of Wellington Jim Rolfe, Political Scientist, Victoria University of Wellington

♦ ♦ ♦

ohn Norton (Hutt City Council and Wellington involving entire government departments should Earthquake Lifelines Group) said that for happen automatically. Many of the buildings they J recovery to be effective, it must be planned occupy are on relatively stable ground that is not for. He noted that the Wellington Earthquake expected to experience liquefaction and severe Lifelines Group was almost a voluntary group and ground shaking. The necessity for the government to that the Wellington Basin Forum had little in the move would have to be decided at the time and there way of physical resources or institutional commit- would be negative aspects of a loss in confidence if ment to support it. The support of both these initia- a move took place. Paul Officer noted that the tives is at present very nominal. He noted that the expression “continuity of government” was used Wellington Earthquake Lifelines Group has had an deliberately rather than “relocation” and government impact nationally in bringing attention to the politicians were extremely unlikely to want to walk importance of lifelines, not just for earthquakes, but away from Wellington. Jim Rolfe agreed, but for other natural hazards as well. He said that it thought it was necessary to have designated govern- needs commitment to provide for the appropriate ment officers who could go to Palmerston North to resources and expenditure to make these initiatives operate from there if necessary. work. Graham Miller said that it was certainly recognised that companies and their staff had put a Ruth Norman asked whether the expertise of the lot of time and effort into the Wellington Earthquake Wellington Earthquake Lifelines Group included Lifelines Group and made a very important contribu- land-use planners. Margaret Laird passed the tion to better understanding of lifelines. He agreed question to David Brunsdon (Project Manager) in that more financial support was needed, backed up the audience, who said that the group is made up of by political support. Neil Britton remarked that both engineers and utility managers from the major those initiatives were relatively recent ones, but now providers of lifeline services. It included scientists, that they had a “track record” in being effective, the but no planners. However, they did liaise closely next phase is to consolidate their credibility. with planners. Their principal role was to promote awareness of issues related to security of lifelines Ruth Norman (Auckland Regional Council) asked and to encourage co-ordination. The group sees its what planning had been done on a serious basis into role at the moment very much in the pre-earthquake the possible relocation of central government context, but later could consider post-earthquake following a major earthquake. Pat Helm said that involvement. this had been under consideration for a long time and schemes were in operation specifying the roles Heather Smith (Waitakere City Council) said that of agencies and planning relocation. For example, her council has signed memoranda of understanding following an earthquake disaster in Wellington, the with adjacent councils to ensure that there is no Reserve Bank would immediately transfer its competition for resources after a natural disaster. operations to Auckland and would have an emer- She asked if there were similar memoranda in gency team fly in from Australia. This has all been Wellington, but on a larger scale. Neil Britton said rehearsed. He was not convinced that relocation that Wellington City Council had agreements with

35 Wellington After the Quake three adjacent councils, including both the response •the Governor General’s power to become involved and recovery phases. The agreements are for co- in a national disaster; and ordination and mutual assistance. He said that it had been a step-by-step process that required develop- •the Domestic and External Security Committee ment of common understanding among the local (DESC) system, involving all departments needed, authorities. Eventually, the Wellington Basin Forum which comes into operation in disasters, wars, may consider bringing in central government as well terrorism, etc. as other local authorities. A large earthquake would affect all of the cities in the Wellington Basin and a In the last few years, there have been 20 major flood mutual problem warranted mutual co-operation. events requiring approvals to be signed, and the Paul Officer said that the present legislation, with all response time was within an hour or so. Last year, of its limitations, does allow territorial local authorities ten civil defence emergencies, two had co-ordinators to develop relationships with others and combine to appointed, one of them under the Civil Defence Act do things for themselves. He said that it is a “play- and the other under the DESC system. ground for lateral thinking” and commended what had been done in Wellington. The worst thing that John Lamb (Canterbury Regional Council and could happen is that people will expect those Christchurch Lifelines Group) said he was pleased at organisations to be able to do things after the the publicity given at the conference so far to the disaster and then find out that they cannot deliver on Wellington Earthquake Lifelines Group. However, the day. he said that what was needed was not political support, but resources. The Christchurch group had David Greig (Auckland Regional Council) spoke of been called an engineering group to limit its scope. the integration of emergency planning that had Fran Wilde replied that providing resources was a recently appeared under the threat of a water crisis in real problem because there was pressure on local Auckland, the magnitude of which could have been authorities to spend less and disaster recovery is “horrendous”. The Auckland Chamber of Commerce seen as being a long way into the future. She and many industries had started to develop disaster considered that awareness was more acute at local management plans. He asked about the role of the government level and there needed to be public private sector in Wellington. Neil Britton agreed that education to create pressure on central government. the private sector must be involved. One of the John Roberts said that it was a test of a mature strands in Wellington City is the development of a society to constantly test assumptions and “contem- draft Wellington Recovery Programme and he has plate the uncontemplatable”. The disposition is been in contact with 85 organisations about this. A there, but what is required is a “galvanising spark” member of his staff, Rachel Scott, added that it to carry it forward on the basis of the scientific involved all sectors of society needing to understand certainty that this earthquake will eventually happen. both their own roles and those of others following a What might be a reasonable response to this disaster natural disaster. For example, Income Support required a rational, well-considered approach. Services will have to continue functioning. Ian McLean (Earthquake Commission) asserted that George Walker (Alexander Howden Reinsurance) an answer still had not been given as to who would asked if there was a clearly defined delegation of have responsibility for setting priorities following powers following a major earthquake or were people the earthquake disaster that is the scenario for this going to sit down in committees when the disaster conference. Paul Officer said that on the scale of this happened. Pat Helm replied that delegation depends scenario, it would have to be central government entirely on the scale of the event, but it would not be because no government could walk away from a a long process to resolve this at the time. The four disaster of this magnitude, but of course local levels of delegation are: government would also be involved. Pat Helm noted that he would not envisage central government •those that can be handled by the territorial local cutting across local government responsibilities authority; because they would not have a knowledge of local issues. Central government would simply want to •those that require the involvement of central ascertain that local authorities were handling the government; situation and were appointing people as recovery managers who were competent to do their jobs.

36 Margaret Laird pointed out that the existing Act was drafted over a decade ago, in 1983, and based on assumptions that no longer exist. She said that the fundamental issue of where responsibilities lie had still to be addressed. Ultimately, there is a need for sound legislative measures to work under. However, the issue was being reviewed and comments were welcome. Paul Officer agreed with Pat Helm about the relative responsibilities of central and local government. He said that the relationship between them is critically important, but it is not possible to predetermine all the actions taken because scenario A would be different from scenario B. Flexibility is needed, depending on the circumstances, and he noted the interesting lessons from the Kobe earthquake about the three levels of government there and their relationships in carrying out tasks. He said that because communications have been established between the various organisations involved in Wellington, they could now work through scenarios in advance of an earthquake.

David Hopkins (Kingston Morrison and Wellington Lifelines Group) said that one important issue not raised so far is the spectacular devolution of assets that used to be owned by central and local government over the last ten years. He wondered whether present planning was taking this into account.

37 Wellington After the Quake

38 Dennis S Mileti

Rebuild? Where?

39 Wellington After the Quake

40 Dennis S Mileti

Urban relocation after earthquakes: Why do cities stay where they are no matter how many times they are damaged?

Dennis S Mileti

Professor of Sociology and Director, Natural Hazards Research and Applications Information Center, University of Colorado, Boulder, Colorado

This paper examines the concept of urban relocation after earthquakes by developing a typology of post-earthquake reconstruction and relocation that examines alternative forms of the phenomenon. The range of factors that have historically been shown to influence the outcome of reconstruction and relocation decisions after urban earthquakes are presented, and their effects on outcomes are addressed. These factors include cultural values, pre-event planning, knowledge of seismic risk and resources. The documented human impacts of relocation after disaster are discussed in an attempt to explore relocation consequences that extend beyond risk reduction. Finally, the conclusion is made that planning for urban relocation and reconstruction after future urban earthquake disasters is a key to the future effective use of these risk reduction mitigations.

Introduction patterns of human interaction. In this way, even the most casual observer of urban reconstruction after Ancient, medieval and contemporary history are earthquakes would conclude that quakes do not tend filled with examples of major urban earthquakes. to significantly alter the basic cultural character of A repeated observation after these disasters is that cities. damaged cities are almost always rebuilt on the same sites rather than relocated to safer territory. The purpose of this paper is to examine the concept This choice has so often been selected throughout of urban relocation after earthquakes. To do so human history that it would be difficult to argue with effectively, the paper also explores urban reconstruc- the supposition that this response to earthquake tion as the most often selected relocation alternative. disaster may be a universal element of the human The paper explores three general issues. Firstly, a character found in urban centres. It transcends all of typology of post-earthquake reconstruction/reloca- recorded time, cuts across all of the physical places tion is developed that examines alternative forms of with an earthquake hazard that have ever been the phenomenon. Secondly, the range of factors that available for human habitation and has occurred have historically been shown to influence the despite the rich variation in the human cultures that outcome of reconstruction/relocation decisions after have constructed urban centres and cities. urban earthquakes are presented, and their effects on outcomes are addressed. Thirdly, the documented Urban areas do more than reconstruct themselves on human impacts of relocation after disaster are the same sites after earthquake disasters. Urban discussed in an attempt to explore relocation conse- reconstruction seems typically driven by human quences that extend beyond risk reduction. Finally, a interests in resurrecting cultural patterns rather than few general conclusions are drawn, based on the physical urban elements. Cities typically reconstruct existing evidence, to inform planning for urban themselves in ways that are consistent with their relocation and/or reconstruction after future urban image of their pre-earthquake cultural and social earthquake disasters. character. Even in modern times and in societies where strong external policies and regulations would redirect the character and priorities of local urban A reconstruction/relocation typology reconstruction, human settlements exert a strong The relocation of a city after an earthquake is not a preference for reconstruction that is in line with pre- simple concept. Relocation can be a varied phenom- quake cultural priorities, e.g. rebuilding city-centre enon that ranges across very different activities, for fountains and churches fundamental to reinstating example, moving the city to a new site and altering local culture and patterns of human interaction take or moving different pre-quake activities to new on much higher priority than structures less central locations within the city’s boundaries, to recon- to the reinstatement of local culture and familiar

41 Wellington After the Quake structing the city as and where it was before the Although intra-urban relocation is both more earthquake. frequent after large disasters than full urban relocation to a new site, it is hardly free of controversy nor Relocation to a new site easily implemented. It is an option that has been chosen after more than earthquake disasters, e.g. History provides a few rare examples of cases in floods are sometimes followed by significant which a city impacted by an earthquake or its changes in local land-use patterns. Two urban secondary associated hazards, e.g. a tsunami, has communities provide examples of the use of intra- totally abandoned its pre-disaster location. Recon- urban relocation in response to the earthquake struction of the city took place on a new and differ- hazard. ent site thought to be less vulnerable to future disasters. The Spitak earthquake was in the 6.5 to 7.0 range and occurred on 7 December, 1988 in the Armenian One example is the city of Valdez, Alaska, and its Soviet Socialist Republic. The three largest cities to relocation after the Good Friday, 27 March 1964 experience heavy damage during the earthquake and earthquake. That earthquake is now estimated to its aftershocks were Spitak, Kirovan and Leninakan. have been 9.3 in magnitude and the largest to have Leninakan had a population of about 250,000 people occurred in the United States in recorded history. before the earthquake. Over half of the buildings in The population of the coastal community of Valdez Leninakan either collapsed or had to be demolished. was around 1000 in 1964. The earthquake caused a A central planning committee for reconstruction was massive underwater earthslide to occur on Valdez’s established and staffed by members of central coastline. The slide induced large waves that government agencies based in Moscow. It was destroyed the city’s commercial and port facilities. determined that residences would not be reconstructed in the pre-earthquake city cell. Replacement Earth scientists were quick to conclude that Valdez housing was reconstructed on the rural fringe of the occupied an extraordinarily hazardous site that was city in an area thought to be more seismically safe. subject to future sliding, ground cracking and sea wave flooding. A reconstruction commission The city of San Bernardino, California, provides established by the federal government determined another example of intra-urban relocation because of that the city should be relocated to a new site rather the earthquake hazard. San Bernardino’s example is than reconstructed on its hazardous coastline. The particularly interesting because it adopted intra- commission was able to exercise great control over urban relocation before, rather than after, an earth- the sentiments of local residents, who were in favour quake. It was determined in the 1970s that San of rebuilding their community on its existing site. Bernardino had a unique vulnerability to earth- The commission gave the citizens of Valdez a quakes. The city is located in southern California’s simple choice. They could relocate to the new site of inland desert. It had altered its water table to provide Valdez with most of the associated cost borne by the water for city services and growth, which made the federal government, or they could rebuild on the old southern half of the city particularly vulnerable to site without any financial aid from government. The liquefaction in future earthquakes. One of the fastest relocation of Valdez and its residents to its new site growing parts of the state, the city chose to zone its was completed a little over three years after the southern section out of high-density use to limit its earthquake. The old site was cleared. vulnerability in future earthquakes.

Intra-urban relocation Reconstruction A much more frequently chosen relocation activity The most frequent option to occur regarding post- after major urban earthquakes is the partial reorgani- earthquake relocation is no relocation at all. This sation of an existing city to take variation in risk includes the reconstruction of public and private within the city’s boundaries into account. For buildings damaged in an earthquake on their original example, certain types of activities may be excluded sites and the permanent repair of individual build- from higher-risk districts that are designated for ings. General reconstruction typically restores the open space or low population density uses. Intra- identity of the city by reconstructing and replacing urban relocation requires changes in pre-disaster what was lost in the earthquake, but this need not land use, and in many ways it is not unlike any always be the case. major urban development project.

42 Dennis S Mileti

The Whittier Narrows earthquake occurred on 1 Culture influences the acceptance of relocating October, 1987 in southern California. The quake and earthquake-impacted communities in several its aftershocks damaged some 10,500 residences and different ways. Firstly, culture bonds people sym- businesses in the Los Angeles metropolitan area, and bolically to their city, and this stands as a general some 12,000 persons were displaced from their all-encompassing constraint to relocation after housing as a consequence. In Whittier, as in most earthquakes. Consequently, the level of quake- US disasters, individual victims were responsible for imposed destruction to the urban environment bears securing their own recovery aid, finding their own direct impact on the willingness of people to aban- contractors or rebuilding their homes themselves, don the site of their pre-quake city. Willingness to and managing their own recovery. Reconstruction leave is much lower when damage is low. The was the order of the day as both businesses and viability of wholesale relocation after earthquakes is homeowners sought to rebuild the dwellings dam- typically low in much of the developed world, since aged by the earthquake. But it went beyond simply rarely, if ever, is quake damage more than scattered restoring buildings. Land-use changes were made and intermittent in a city. that did not alter future risk, but enabled some to gain financially. Apartment and multi-family Culture also impacts the acceptability of new cities buildings were allowed to encroach into pre-quake at new sites when those sites offer opportunities areas of single-family dwellings. consistent with pre-quake cultural patterns, for example, being close to roads, water resources, local Factors that influence relocation and markets and jobs, and when the new community conforms to the “organic” pattern of the settlement reconstruction that is being abandoned. For example, new commu- A major purpose of social scientific investigations of nities characterised by physical grid patterns find post-earthquake relocation has been to identify residents who are quick to build walls, plant trees factors that play a significant role in determining and use other adaptations to alter the design of post- relocations and reconstruction decisions. Relatively disaster settlements to resemble their pre-disaster speaking, few studies exist on the topic. Neverthe- communities. less, existing research provides a compelling case for the conclusion that the following factors have Pre-event planning and may continue to play major roles in directing post-earthquake urban relocation and reconstruction Recent investigations provide a strong case for the decisions. Unfortunately, it is difficult and perhaps influential role of pre-event planning in directing impossible to suggest the likely relative weights of post-earthquake relocation and reconstruction. The these factors on influencing relocation/reconstruc- post-earthquake environment is one in which many tion outcomes. problems must be solved in a hurry, and the consequence is often that post-earthquake reconstruction and relocation practices are impacted by the need to Cultural values move quickly. The priorities of disaster recovery to All human communities and societies have culture, deal with the immediate needs for factors including that is beliefs, ideals and customs that all their safety, shelter, food and water often have long-term members share and that make one society different implications. For example, temporary housing from another. Values are the beliefs, attitudes and located on the site of the disaster turns into perma- the expectations of conduct by which a society lives. nent housing in poorer communities; in wealthier Ideas of territory, land ownership, tenure, inherit- areas it most often results in the erection of support- ance and many other cultural factors are ingrained in ive infrastructure that directly influences reconstruc- local societies. Cultural values have profound tion patterns and constrains the option of relocation. bearing on the ways that dwellings and human settlements are designed, built, used and passed on Information. Pre-earthquake planning for post- to subsequent generations. They also influence disaster relocation and reconstruction can dramati- attitudes on land use, settlement and building, and cally reduce the unintended impacts of immediate they certainly influence relocation and reconstruc- disaster response actions on post-disaster decisions. tion preferences after urban earthquakes. But informed pre-event planning demands information including:

43 Wellington After the Quake

•the characteristics of the hazards and the geo- of risk reduction through altered land use patterns graphic areas likely to be impacted; after earthquakes. •a demographic analysis of the population’s size, Damage evaluation. A major issue that impacts composition and distribution; reconstruction and relocation decisions after major • data on the local economy; urban earthquakes comprises problems encountered in the evaluation of building damage. Many of the •the resources likely to be available in the post- problems that characterise building safety evalua- earthquake environment; tions plague the recovery phase after quakes rather • knowledge of the powers, programmes and than reconstruction/relocation. But the assessment of responsibilities of local, state and central govern- damaged buildings in the recovery period to deter- ments; mine resilience to aftershocks often has dramatic • existing land-use patterns and building stock implications for the long-term disposition of a characteristics and location; and building. For example, there is often a link between quick damage evaluations and future public contro- • an inventory of local infrastructure, for example, versy, the objectives of damage evaluation are often water, power, communication and transportation not clear to those performing the evaluations, and lifelines. evaluation decisions are not always supportable. A decision that a building is unsafe, as based on a short Organisation. Even when city governments have the appraisal of the structure, is too often incorrectly authority needed to address post-earthquake reloca- interpreted as a demolition recommendation. tion and reconstruction issues and strong leadership Conversely, people want to reoccupy a damaged inclined to use those powers, the post-earthquake building as soon as possible. The result is often that desire to return to normal as quickly as is possible damage is quickly hidden and improperly repaired often results in relaxing restrictions on reconstruc- without adequate professional inspections. tion rather than increasing them. Pre-event planning must, therefore, provide for reconstruction and Post-earthquake risk reduction relocation and relocation organisations in anticipation of probable reconstruction decisions can be enhanced if pre- future disasters. An official rebuilding and restora- quake plans are in place to quickly and adequately tion team in-place immediately after a major earth- mobilise and coordinate efforts to inspect building quake greatly enhances reconstruction and relocation damage, set standards for the repair and reconstruc- decision making. Pre-event planning should provide tion of earthquake damage as warranted, and make the team with adequate staff and ability to hire them, the relocation of urban areas an option in addition to a well-defined role, appropriate authority and power, the repair/demolition decision when individual and guidelines. buildings are inspected after earthquakes.

Procedures. The political processes that must be followed in making decisions about reconstruction Knowledge of seismic risk after urban earthquakes tend to consume time and Particularly in the absence of wholesale destruction delay reconstruction decision making. A typical after an urban earthquake, the viability of relocation, decision making sequence can include making a intra-urban relocation and reconstruction decisions is reconstruction proposal, discussion, public review, severely impacted by the ability to delineate hazard- appeals, a public referendum and so on. Using ous areas and evaluate the level of risk pertaining to existing non-earthquake related procedures in the alternative uses of different parcels of urban land. post-earthquake environment does more than delay The level and location of damage experienced in a decisions. It also constrains the use of relocation as a quake certainly influences perception of hazard in reconstruction option, since it is typically based on a reconstruction. These perceptions are as applicable building-by-building decision making model. to influencing post-earthquake seismic design Existing procedures for construction decision standards as they are to directing intra-urban reloca- making obviously should be streamlined after an tion decisions. earthquake. More importantly, pre-earthquake plans for changes in post-earthquake reconstruction Yet few areas of the world are informed with decision making procedures could enhance the use confidence about the seismic risk that they face. For of the relocation option if they incorporate a vision example, the recent Hanshin earthquake near Kobe,

44 Dennis S Mileti

Japan, far exceeded the magnitude earthquake that members of a community’s lower-income groups some of the best seismologists in the world thought because groups such as these tend to occupy housing could occur in that region. Moreover, microzonation most vulnerable to quake damage, these groups lack of seismic hazard is an expensive and elaborate the resources to readily recover from losses, and endeavour that no community has been able to quakes and reconstruction tend to reduce the supply conduct in the aftermath of a major earthquake. of affordable housing for low-income people.

Additionally, a rigorous evaluation of seismic risk in Reconstruction and relocation after earthquakes also the post-earthquake environment would very likely impose unequal impacts on the affected population. slow the pace and timing of decision making after an For example, the demolition of buildings typically earthquake, at the very time that people are most results in the removal of affordable housing, and anxious to restore their lives, homes and community. marginal businesses typically cannot survive the Because people like to reconstruct quickly, it is abandonment of storefronts even for a brief period difficult for seismic risk to strongly influence of time. Impacts such as these are escalated as reconstruction and relocation decision making in the reconstruction and intra-urban relocation replace old absence of obvious wholesale destruction of particu- building stock with structures built to current code lar areas if it is not clearly mapped, or at least and valued closer to the current market values. In understood, before the earthquake happens. this way, reconstruction creates a redistribution of resources that certainly creates winners and losers. Finances Few plan for reconstruction and relocation after Post-earthquake relocation and reconstruction earthquakes in ways that do more than rebuild decisions and outcomes are dramatically influenced structures but also provide for reducing the increased by the amount of money available for the post- inequality and problems that are created for marginal disaster mitigation of future seismic risk. Relocation social and economic groups. is extraordinarily expensive, and recent urban relocation cases typically occurred when the fi- Psychological effects nances needed were provided by a national government. Intra-urban relocation is also expensive and, It is no surprise that earthquakes impose psychologi- more often than not, it is most likely when paid for cal impacts on the human populations that they by programs from a national government. The affect. For example, research documents symptoms quality and timing of reconstruction on site is also including depression, post-traumatic stress disorder, influenced by the availability of finances (for ulcers, attempted suicide, stroke, heart attack, example, the public resources available for repair), admission to psychiatric hospitals and others. The the limitations imposed by available financing, the subpopulations most likely to be affected include availability of government-sponsored loans and early emergency responders, the young, the old, grants, and the extent to which damage is covered by those who were trapped, people who received a blow insurance. to their head or neck, those who experienced the disruption of important social ties and others. Relocation/reconstruction impacts Population subgroups also react differently to relocation. Old people, lower-income people, long- Few studies have been performed on the societal term residents and those who had strong social ties impacts of reconstruction and relocation after major to local individuals or institutions in their pre-quake urban earthquakes. The evidence that does exist city have the greatest difficulty adjusting to their suggests that impacts do exist and that they centre on post-relocation situation. the issues of equity and psychological effects. Conclusions Equity Based on historical experience, the alternatives Earthquakes impose unequal impacts on the popula- available for seismic risk reduction after urban tion. Inequity in the distribution of impacts is largely earthquakes seem limited, and there are several the result of social and economic differentiation in reasons why this may be the case. These include that the affected population. For example, losses tend to people want to return to normal conditions quickly, accumulate most among the poor, the elderly and damage is seldom extensive enough to make reloca-

45 Wellington After the Quake tion a real option, existing procedures and organisa- Geipel, Robert. 1991. Long-Term Consequences of tional arrangements to deal with buildings favour Disasters. New York: Springer-Verlag. decision making about individual structures, which places relocation somewhat out-of-mind, the funds Haas, J Eugene, Robert Kates and Martyn J Bowden. needed for relocation are typically not available, and 1977. Reconstruction Following Disaster. Cam- few communities have in place the kind of pre- bridge, Massachussetts: MIT Press. disaster plans needed to effectively influence post- earthquake reconstruction and relocation decisions. Handmer, John W. 1985. Local reaction to acquisi- tion: An Australian study. Working paper 53. There is clear evidence for the conclusion that the Natural Hazards Research and Applications Infor- use of reconstruction, intra-urban relocation and mation Center, Boulder, Colorado. wholesale relocation of urban areas after earthquakes as techniques to reduce risk to future earth- Moser, David A. 1985. Assessment of the Economic quakes is most likely a consequence of the failure of Benefits from Flood Damage Mitigation by Reloca- communities and societies to effectively plan for tion and Evacuation. Final report for the US Army reconstruction before earthquakes occur. Corps of Engineers Institute for Water Resources, Ft Belvoir, Virginia.

Bibliography Oliver-Smith, Anthony. 1990. “Post-disaster housing Alexander, David. 1986. Disaster preparedness and reconstruction and social inequality: A challenge to the 1984 earthquakes in Central Italy. Working policy and practice.” Disasters 14(1):7-19. paper 55. Natural Hazards Research and Applica- tions Information Center, Boulder, Colorado. Oliver-Smith, Anthony. 1982. “Here there is life: The social and cultural dynamics of successful Arnold, Christopher. 1993. Reconstruction after resistance to resettlement in postdisaster Peru.” pp. Earthquakes: Issues, Urban Design, and Case 85-103 in Involuntary Migration and Resettlement: Studies. Final Report to the National Science The Problems and Responses of Dislocated People. Foundation. Building Systems Development, Inc. Eds. Art Hansen and Anthony Oliver-Smith. Boul- San Mateo, California. der, Colorado: Westview Press.

Aysan, Yasemin and Oliver, Paul. 1987. Housing Rohe, William M and Scott Mouw. 1991. “The and Culture after Earthquakes. Oxford, UK: Oxford politics of relocation: The moving of the Crest Street Polytechnic. community.” Journal of the American Planning Association 57(1):57-68. Bates, Frederick L and Charles D Killian. 1982. “Changes in housing in Guatemala following the Walters, K J. 1978. “The reconstruction of Darwin 1976 earthquake: with special reference to earthen after Cyclone Tracy.” Disasters 2(1):59-68. structures and how they are perceived by disaster victims.” Disasters 6(2):92-100. William Spangle and Associates Inc. 1985. Pre- Earthquake Planning for Post-Earthquake Rebuild- Bolin, Robert. 1993. Household and Community ing. Final report to the National Science Foundation. Recovery after Earthquakes. Institute of Behavioral William Spangle and Associates Inc., Portola Science, Program on Environment and Behavior, Valley, California. Natural Hazards Research and Applications Infor- mation Center, Boulder, Colorado. William Spangle and Associates Inc. 1980. Land Use Planning After Earthquakes. Final report to the Durkin, Michael. 1987. The emotional impact of National Science Foundation. William Spangle and post-disaster relocation. Quick response research Associates Inc., Portola Valley, California. report 5. Natural Hazards Research and Applications Information Centre, Bolder, Colorado.

Geipel, Robert. 1982. Disaster and Reconstruction. London: George Allen and Unwin.

46 Steven P French

Planning for reconstruction: Opportunities and constraints facing Wellington

Steven P French

Professor and Director, City Planning Program, Georgia Institute of Technology, Atlanta

Major reconstruction presents a logical opportunity to mitigate further hazard exposure. Avoiding well-defined areas of secondary hazards (e.g. areas prone to landslide or liquefaction) and replacing heavily damaged clusters of fragile structures (e.g. unreinforced masonry buildings) are obvious responses. The reconstruction period offers a unique opportunity to undertake such strategies if proper planning is in place.

This paper describes the reconstruction opportunities and constraints facing Wellington after a major earthquake. Planning for reconstruction must, however, anticipate the well-documented demands of the affected population to return as quickly as possible to the status quo ante. Past research shows that, to be effective, reconstruction plans must be developed and adopted well before the event. Effec- tiveness can be further enhanced by making key institutional arrangements, such as creating redevelopment authorities or identifying sources of reconstruction funding, prior to the earthquake.

Particular attention must be paid to the spatial distribution of damage. Experience from two recent earthquakes — 1989 Loma Prieta and 1987 Whittier Narrows — provides important lessons regarding the way in which damage is often scattered in a few concentrated clusters. Reconstruction planning must be tailored to address this phenomenon.

Introduction hours after the event. This is followed by the restoration phase, during which essential services are Wellington is clearly a city that is situated in an brought back to normal operation. This phase extremely hazardous location. It sits atop the generally occurs from 72 hours to several weeks Wellington Fault, which has the potential for a 7.5 after the event. The third phase, reconstruction, is Richter magnitude earthquake. The scenario pro- divided into two parts. The first part focuses on vided to conference participants suggested that an rebuilding and bringing infrastructure systems to event of this magnitude would severely damage pre-event conditions. This usually begins within one more than 3000 buildings, killing some 1600 week of the event and lasts for several years. A residents and injuring another 10,000. Other studies second part of reconstruction is focused on better- suggest that death and casualty totals would be ment and upgrading of the community. This last considerably lower, but in any event Wellington is phase can extend as long as ten years after the event. clearly subject to serious earthquake damage. This paper will focus on both parts of the reconstruc- Perhaps if the earthquake hazard had been fully tion phase. understood when the city was founded in 1840, another site would have been chosen. However, In reconstruction, the principal concerns are where when one considers an alternative location, there are the damaged elements of the city will be rebuilt on a very few sites that offer sufficient level area for a permanent basis and to what standards. Many of the city the size of Wellington. Complete relocation is same standards used in land-use planning for not a viable alternative at this late date, given the earthquake-prone areas will apply to reconstruction investment in Wellington, including buildings, planning (French and Isaacson, 1984; Bolton et al., infrastructure and transportation facilities. The task 1986). This is not to suggest that planning for now is to seek strategies that will make Wellington emergency response and short-term recovery is safer. unimportant — it is. Our concern here, however, is with the longer-term rebuilding of the city of Kates and Pijawka (1977) define three phases of Wellington. In many cases, the data needs and rebuilding after a natural disaster. The first is the emergency response phase, typically the first 72

47 Wellington After the Quake policies for reconstruction can support and reinforce guide the reconstruction is important if this opportu- emergency response planning. nity is to be fully utilised. In the absence of a robust plan, reconstruction may replicate the mistakes of As a first principle, those considering the rebuilding the past by reconstructing the same types of build- of Wellington should remember that an earthquake ings in the same hazardous locations. will not eradicate all existing development. Planning for reconstruction in an infill situation is much more While New Zealand has experienced earthquakes of difficult than planning for development of vacant significant magnitude in the recent past (e.g. the land. The range of development options is severely 1987 Bay of Plenty earthquake), none have occurred limited by the remainder of the building stock and in close proximity to a major urban area. As a result, infrastructure systems that are left undamaged. Thus, lessons from four recent California earthquakes will an important concern when planning for reconstruc- be used to identify opportunities and constraints tion is how to integrate replacement construction facing Wellington. Table 1 lists the four earthquakes into the existing urban fabric. that have damaged California urban areas in the past twelve years. These earthquakes can provide useful Reconstruction presents two major opportunities. insights into the type of damage likely to occur in The first and most important opportunity is to Wellington and the key issues to consider in plan- mitigate particularly hazardous situations. This ning for reconstruction. can be done by relocating development out of particularly hazardous Table 1: Recent California earthquakes areas, such as liquefaction zones, or Earthquake Year Magnitude Estimated property Deaths by replacing vulnerable structures damage with ones that are engineered to (in millions of dollars) withstand higher levels of ground Coalinga 1983 6.7 31 0 shaking and other earthquake-induced Whittier Narrows 1987 5.9 358 8 hazards. The other opportunity is to Loma Prieta 1989 7.1 5600 62 use the reconstruction period to make Northridge 1994 6.7 20,000 57 more general improvements in urban design and urban form. This paper will outline the opportunities and constraints facing Wellington in the reconstruction Past research by William Spangle and Associates period following an earthquake of 7.5 magnitude. It (1991) and others has shown that two countervailing will first describe the nature of the earthquake forces operate during the reconstruction period. The hazard facing Wellington. It will then consider first force is the desire of planners, engineers and important aspects of reconstruction planning and public safety officials to use the opportunity af- suggest strategies as to how each aspect might be forded by the earthquake to mitigate the hazard by approached in preparing a reconstruction plan. rebuilding in a safer manner and to avoid particularly hazardous locations altogether. The counter- The hazard facing Wellington vailing force is the intense desire of the affected population to return as quickly as possible to normal As described in a recent study by the Centre for conditions. This is generally defined as restoring the Advanced Engineering (1991), there are a number of types and patterns of development exactly as they earthquake hazards that affect the Wellington region. existed before the disruption of the earthquake. This A M7.5 earthquake on the Wellington fault is pressure to rebuild to the status quo ante is likely to expected to produce ground accelerations of 0.9 g or preclude all but the most obvious reconstruction greater under most of the urbanised parts of the opportunities. region, including Wellington’s central business district, Karori, Thorndon, the Hutt Valley and much Reconstruction after a major earthquake presents an of the Miramar Peninsula. This level of ground opportunity to mitigate the hazard through both shaking can be expected to severely damage large locational and structural adjustments. The period numbers of unreinforced masonry buildings, as well after a damaging earthquake is a unique “window of as causing scattered damage to more modern opportunity” to make major adjustments to increase structures. It will also cause significant damage to the ability of the city to withstand future events. Past the region’s urban infrastructure and transportation research has shown that a well developed plan to systems.

48 Steven P French

An event of this magnitude is expected to trigger a for the actual pattern of damage experienced. Even number of secondary hazards. Probably the most so, modification of an existing plan that sets out the damaging of these is widespread soil liquefaction. In general reconstruction strategy is likely to be much a M7.5 event, severe liquefaction can be expected in easier than creating an entirely new plan. the reclaimed lands in the harbour areas of Welling- ton and Petone. Scattered liquefaction is also likely Analysis of the 1989 Loma Prieta earthquake around the mouth of the Hutt River and in the indicates that damage to urban areas can be quite central area of the Miramar Peninsula. Significant scattered (French, 1995). Figure 1 shows that landsliding is also likely and will occur along the damage to infrastructure and other public property fault scarp and in other areas of extremely steep from this earthquake was concentrated in several slope, such as those that characterise much of the clusters in the San Francisco region. While it caused region’s shoreline in the Roseneath-Oriental Bay significant damage near the epicentre, the heaviest area. damage occurred more than 50 miles (80 km) away. Much of the area within 10 to 20 miles (15 to 30 While the Wellington fault is capable of producing a km) of the epicentre was heavily developed, but, due M7.5 earthquake, it is also capable of producing a to stable soil conditions and building types, sus- damaging event of lesser magnitude. It should be tained relatively little damage. noted that all of the recent California earthquakes were well below M7.5. Those areas that experienced heavy damage were generally located on unstable soil or in areas of Planning for reconstruction particularly vulnerable structures. Even at the neighbourhood level, it is not uncommon to find Reconstruction rarely happens without a plan, yet few cities prepare such a plan before an earthquake. Many are forced to develop Solano a plan to guide their reconstruction after Marin a damaging earthquake. In most cases, this is too late to institute effective changes. The pressures to get on with Contra Costa the rebuilding preclude collection of San Francisco new data and a thoughtful consideration of all alternatives. In such a situation, it is difficult to take advantage of the Alameda opportunities presented by reconstruction. San Mateo

There are good reasons for the lack of plan making before an earthquake occurs. The greatest difficulty lies in the Santa Clara fact that the exact nature of the damage M7.1 is difficult to predict. Even with today’s Santa Cruz sophisticated mapping, modelling and risk analysis techniques, there is a large stochastic element in the damage pattern. The exact distribution of damage will vary depending on the size San Benito and the location of the specific earth- City County quake. Unmapped geologic features and 500 to 100,000 soil conditions can intensify damage at 100,000 to 1,000,000 Monterey particular locations. Minor differences in construction quality can result in 1,000,000 to 10,000,000 Miles large differences in the level of damage. 10,000,000 to 90,000,000 As a result, any plan developed before 01020 the event must be modified to account Figure 1: Public damage claims from the Loma Prieta earthquake

49 Wellington After the Quake severely damaged structures juxtaposed with manage damage to lifelines (Britton, 1994). Through structures that have experienced little or no damage. the Wellington Emergency Management Office, the Seemingly identical infrastructure components often city is developing a recovery plan that is modelled in behave very differently in response to the earthquake part on the Los Angeles plan. However, to the best stress. Some of this variation can, of course, be of my knowledge, Wellington has been less active in explained by differences in underlying soil condi- planning for reconstruction. While the Los Angeles tions or to differences in construction quality, yet plan had not been finally adopted at the time of the even after taking these factors into account, a 1994 Northridge earthquake, it was largely com- significant amount of variation in the damage pattern plete. It was adopted just after the earthquake and remains unexplained. As a result, our best models was used to guide the reconstruction effort from the are unable to predict the exact pattern of damage, outset. The effectiveness of this plan in guiding this even if we know the precise location and magnitude effort will provide important lessons on how we of the earthquake for which to plan. Does this imply should plan for reconstruction. that it is impossible to plan for reconstruction before the event occurs? No, but planners must recognise Interestingly, the draft of the Los Angeles Recovery that this uncertainty makes their task more difficult, and Reconstruction Plan that was adopted in January and their plans must be designed to accommodate 1994 dropped many of the policy statements that this uncertainty. sought to take advantage of the earthquake to relocate development. For example, Policy State- This level of uncertainty, coupled with the rapid ment No. D.5 — Replanning Hazardous Areas pace of reconstruction, make traditional land-use states: regulation techniques, such as zoning and subdivi- It is the city’s policy to replan hazardous and sion controls, less than ideal tools to guide earth- devastated areas and recognized disaster quake reconstruction. These traditional tools can and generated constraints and opportunities. should play an important role in limiting the amount, type and density of development in hazardous areas (Los Angeles Emergency Operations Organization, 1994, p. 68.) before the earthquake, but in the aftermath of an earthquake, there will be insufficient time to enact This policy, and its five implementation pro- the necessary legislative changes to reshape urban grammes, were dropped from the version of the plan development using them. Furthermore, the emo- adopted by the Los Angeles Emergency Operations tional period following a disastrous earthquake is Organization. Other strong statements dealing with unlikely to provide a political environment condu- relocating development outside hazardous areas and cive to thoughtful consideration of reconstruction identifying areas with substantial numbers of alternatives. Thus, the general framework for unstrengthened buildings were also dropped. reconstruction planning must be in place before the Nevertheless, I suggest that those components be earthquake occurs. made a part of Wellington’s reconstruction plan. A reconstruction plan cannot be an exact blueprint for reconstruction; instead it must establish key Institutional organisation guiding principles. A good plan must be more than a Perhaps the single most important step in pre- physical plan that specifies the location of damaged earthquake preparation is to develop an effective buildings and infrastructure to be reconstructed. It organisational structure to manage the reconstruction must also address the organisational and economic process. Britton (1994) and others have highlighted aspects of reconstruction. the need for effective organisation of emergency management. This need extends to the reconstruc- Perhaps the best current example of an earthquake tion phase as well. reconstruction plan developed prior to an event is the Los Angeles Recovery and Reconstruction Plan The case of Coalinga, California, provides an (1994). This plan includes recommendations to interesting lesson in organising for reconstruction guide both emergency response and reconstruction (French, 1984; Tierney, 1985). In May 1983, the activities. Wellington has made significant progress small town of Coalinga experienced a M6.9 magni- in preparing for emergency response. The city has tude earthquake that occurred on a previously created the Wellington Emergency Management unknown fault. The six-block downtown area that Office and has been especially active in preparing to consisted of two-storey unreinforced masonry

50 Steven P French structures was virtually destroyed. Within two years, themselves, but also areas subject to landslide and the downtown was replaced by a modern low-rise liquefaction. Secondly, the region should develop a downtown shopping area. Local residents concede detailed inventory of the building stock. Such an that the rapid reconstruction and redesign of the area inventory should classify each building by its would not have been possible without Coalinga’s structural type (e.g. wood frame, steel frame or Redevelopment Authority, which guided the recon- unreinforced masonry). In addition, the size, value struction. The Redevelopment Authority had been and current use of each structure should be cata- created prior to the earthquake to revive the down- logued. Finally, a similar database should be devel- town area, which was economically depressed. After oped for the region’s infrastructure, including water the earthquake struck, the city recognised the need supply, sewerage, roads, telephone, electric power for one agency to take the lead in the rebuilding and natural gas systems. The database should process. Because the Redevelopment Authority was include the age and capacity of each component of created with power to condemn land and issue these systems. For network systems, such as the bonds, it was the agency selected to manage the water distribution system, the material, diameter and rebuilding. It was able to assemble the land and length of each pipe segment should be incorporated acquire funding to develop a more viable downtown. in the database.

The City of Los Angeles has created a Recovery and Wellington has undertaken an inventory of hazard- Reconstruction Division as a part of its Emergency ous buildings. Roughly half of the 758 structures Operations Organization. This division was created identified have been demolished or strengthened in to coordinate the roles of multiple city agencies in the past 20 years (N R Britton, personal communica- the reconstruction process. The effectiveness of this tion, 1995). approach is unclear at this point. The best organisational framework to guide redevelopment is unclear. A geographic information system should be used to It does seem clear that the plan must designate one store and manipulate both the hazard and inventory organisation to plan for and manage the reconstruc- information. This technology makes it possible to tion process. This may or may not be the one that is identify which buildings and infrastructure compo- charged with managing the emergency response nents are located in areas of unstable soil and other phase. particularly hazardous areas. After an earthquake occurs, the damage to each structure and infrastruc- It is also important to determine how the large ture system can be easily added to the database. number of building permits and inspections required Once actual damage data is added, the GIS becomes for reconstruction will be handled. It may be neces- a powerful tool for reconstruction planning because sary to develop a set of streamlined procedures and it can combine information on the hazard, the to determine specific areas where such expedited building inventory and the infrastructure systems. procedures will be applied. Concentrations of heavy damage can be easily identified. As part of the planning process, alterna- Information needs tive development patterns can be tested for exposure to the hazard and for compatibility with undamaged To begin the reconstruction process quickly, it is infrastructure systems. Such testing can assume that important to have adequate information about the the best reconstruction alternative is selected. city and the hazard. Much of this information can be developed before the earthquake. Capturing the Commercial and industrial areas information in a geographic information system (GIS) will allow it to be manipulated to model As a rule, pressure for reconstruction of commercial damage before the earthquake. This same informa- and industrial areas as quickly as possible is very tion can be used for emergency services planning strong. The costs associated with business interrup- and to support reconstruction planning after the tion significantly increase the physical damage costs event. Wellington has already begun to develop experienced by business. To provide more time to important parts of this type of database. plan and execute significant reconstruction, temporary facilities can be created, particularly for retail Several types of information are needed to guide the shopping. For example, shortly after the Northridge reconstruction process. First is detailed mapping of earthquake, which virtually destroyed downtown the hazard. This would include not only the faults Filmore, California, the local Chamber of Com-

51 Wellington After the Quake merce and the city government created a shopping structures with a soft first storey, usually parking bazaar in a local park. Local merchants were able to garages. The Marina District of San Francisco relocate their downtown shops while the reconstruc- experienced numerous failures of the latter type tion of downtown was planned and implemented. during the Loma Prieta earthquake.

Physical damage, inventory losses and significant Also in the 1989 Loma Prieta earthquake, damage to business interruption can be enough to eliminate the older housing stock in Oakland was particularly marginally profitable businesses. These types of problematic because it eliminated much of the businesses are often located in older, more vulner- housing available to low-income residents. Since able buildings. Thus, the reconstruction process these affordable apartments were only marginally must take account of the fact that some businesses profitable, if at all, landlords have been relatively may not survive the earthquake. As a result, there slow to replace them. Thus, the earthquake signifi- may be fewer businesses and a different mix of cantly damaged the mix of housing available by commercial uses in the reconstructed city. While it is eliminating many of the most affordable units. These difficult to determine beforehand which businesses types of units were disproportionately damaged will fail, a rough estimate based on the experience of because they were more likely to be in older, more cities of similar size will help planners understand vulnerable structures. To avoid negative impacts on the likely changes in this type of land use. Recon- the supply of affordable housing, the reconstruction struction of commercial areas offers an important plan may need to include explicit provisions to opportunity to improve urban design features that ensure the rebuilding of affordably priced rental make the area attractive to shoppers. The case of units. Coalinga cited earlier and of the downtown Santa Cruz mall are examples of commercial areas that The Association of Bay Area Governments (1992) were significantly upgraded when they were rebuilt has developed a model to predict the number of after suffering severe earthquake damage. uninhabitable dwelling units that are likely to result from various earthquake scenarios. The model is Hazardous materials are most likely to be found in primarily used to estimate the demand for temporary industrial areas. The presence of these materials can housing, but its output could also be useful for complicate debris removal and may also cause reconstruction planning. significant contamination of soil and ground water in the case of serious spills. Reconstruction of these Two issues are important to recognise regarding areas may have to account for these types of prob- residential reconstruction. Since many single-family lems. homes are owner-occupied, the pace of reconstruction is likely to be tied to the availability of insur- Residential housing ance payments or subsidised loans. Owners will rarely have the resources to finance rebuilding on In the recent series of California earthquakes, their own. Secondly, there is a tendency in many damage to newer, single-family houses has been cases for temporary housing to become permanent. limited. This portion of the building stock is largely This is particularly true of mobile homes. Low- composed of wood frame structures that are able to income residents may find much of the affordable withstand ground shaking better than most other housing stock destroyed, with market forces unwill- types of structure. The principle exception was in the ing to replace it. 1983 Coalinga earthquake, where large numbers of older houses were destroyed as their wood frames Infrastructure systems shifted off their concrete foundations. More modern building codes require that framing be securely Components of most infrastructure systems exist as bolted to the foundation to prevent this type of parts of larger networks. Because of the interdepend- damage. ent nature of these networks, damage to key components can affect the performance of the entire The largest proportion of damage to the housing system. Thus, planning for infrastructure must take stock in the other three California events was account of the connected nature of these systems. sustained by multi-storey apartment buildings. This Studies of the 1989 Loma Prieta and 1987 Whittier damage was of two types — damage to older Narrows earthquakes indicated that a relatively unreinforced masonry structures and collapse of small percentage of the overall infrastructure system

52 Steven P French is likely to be severely damaged (French, 1993). As • detailed mapping on the earthquake hazard and a result, the existing pattern of infrastructure is likely the local building and infrastructure inventories, to survive the earthquake. This pattern can be a preferably in a GIS format; major constraint to radical alteration of the city’s •identification of areas where reconstruction current urban form. Past investments in infrastruc- should be limited to lower densities or relocated; ture systems make it difficult to abandon most developed areas. Only in those areas where both the •identification of less hazardous areas that can building stock and the infrastructure systems are serve as receiving areas for relocated develop- severely damaged is it economical to undertake ment; and large-scale relocation. •identification of financing mechanisms that will support reconstruction, particularly for afford- It is, however, important to include mitigation as able housing and other non-market uses. part of the reconstruction process. Damaged infrastructure components should be upgraded to make Wellington has already started to plan its response to them more earthquake-resistant. Minor relocation of the likelihood of a future earthquake. Hopefully, this distribution lines around hazardous areas may be conference will encourage local officials, research- possible in some cases. Some consolidation of ers and planners to extend those efforts further and storage tanks and treatment plants may also be to develop plans that can not only restore the city possible. after an earthquake, but make it safer and better when it is rebuilt. Land-use pattern While wholesale relocation is unlikely, the recon- References struction process does offer an opportunity to make Association of Bay Area Governments. 1992. useful adjustments in the existing land-use pattern. Estimates of Uninhabitable Dwelling Units in Opportunities will exist to lower residential densi- Future Earthquakes Affecting the San Francisco Bay ties, replace older shopping areas with more modern Region. Association of Bay Area Governments, shopping districts and replace hazardous buildings Oakland, California. with less vulnerable structures. There may also be opportunities to create open space in particularly Bolton, P A, S G Heikkala, M M Greene and P J hazardous areas, such as landslide, liquefaction and May. 1986. Land Use Planning for Earthquake fault rupture zones. Neighbourhood parks and linear Hazard Mitigation. A Handbook for Planners. parks along rivers or shorelines can be created in Natural Hazards Research and Applications Infor- areas of severe damage. These opportunities should mation Center, Boulder, Colorado. be identified early in the process of preparing the data sets described earlier in this section. If major Britton, N R. 1994. “Emergency management and relocations or reductions in density are deemed lifeline coordination: Wellington City case study.” desirable, receiving sites for the development to be Paper prepared for 1994 Wellington Earthquake relocated must be identified. Lifelines Group Workshop, Wellington.

Conclusions Centre for Advanced Engineering. 1991. Lifelines in Earthquakes: Wellington Case Study. Christchurch: In the event of a damaging earthquake, Wellington University of Canterbury. will have an opportunity to rebuild in ways that lower the vulnerability of the city to future events French, S P. 1984. Restoration and recovery follow- and solve existing land use and urban design prob- ing the Coalinga earthquake of May, 1983. Working lems. To best take advantage of such an opportunity, Paper No. 50. Natural Hazards Research and the region should have a reconstruction plan in place Applications Information Center, Boulder, Colorado. before such an earthquake occurs. The plan should include the following items: French, S P and M Isaacson. 1984. “Applying earthquake risk analysis techniques to land use • designation of a lead agency to manage the planning.” Journal of the American Planning reconstruction; Association.

53 Wellington After the Quake

French, S P. 1993. “Public property damage and emergency response costs: Comparing the Loma Prieta and Whittier Narrows earthquakes.” Earth- quake Spectra. Richmond, California: Earthquake Engineering Research Institute.

French, S P. 1995. “Damage to public property from the 1987 Loma Prieta earthquake.” Disasters. Manchester.

Kates, R W and D Pijawka. 1977. “From rubble to monument: The pace of reconstruction.” In Recon- struction Following Disaster. Eds. J E Haas, R W Kates and M J Bowden. Cambridge, Massachusetts: MIT Press.

Los Angeles Emergency Operations Organization. 1994. Recovery and Reconstruction Plan. City of Los Angeles, Los Angeles, California.

Tierney, K J. 1985. Report on the Coalinga Earth- quake of May 2, 1983. California Seismic Safety Commission, Sacramento, California.

William Spangle and Associates Inc. 1991. Rebuild- ing After Earthquakes: Lessons from Planners. William Spangle and Associates Inc., Portola Valley, California.

54 Christopher McDonald

Keeping catastrophic change in context

Christopher McDonald

Lecturer in Architecture and Urban Design, Victoria University of Wellington

Cities are resilient. Their capacity to survive results from great scale, massive infrastructure and a high degree of redundancy and autonomy among their parts. Permanence also expresses the human quest for eternity. For this reason, images of destroyed or abandoned cities are shocking to us. They portray complete loss, the threat that, individually and collectively, we will one day vanish without trace. A ruined city represents the end of history, the absence of destiny.

There is another urban image deeply embedded in most cultures. Confronting the eternal city is the ideal city — the future city, utopian, visionary, critical. As we plan for Wellington after the quake, the prospect of destruction is tempered by the promise of renewal. A calamity is an invitation to start again.

This paper examines the real opportunities that are found between these two contradictory impulses.

Reinventing Wellington: rival paradigms and there are no natural limits to their size. If the for an ideal city system is broken or damaged, components are simply replaced, connections are repaired and the What is a city? Here at this conference, each disci- processes will start over again. When we interpret pline and profession will answer the question the city as a collection of infrastructure, this para- differently. Urban designers have their own unique digm is active. perspective on the subject. They employ a cluster of definitions to explain urban form and forecast change1. The city is an organism Our own biology invites us to regard the city as an The city is a cosmological diagram organism. In this anthropocentric analogy, each town and every community are identities. Although The very first cities may have been constructed as we recognise the specialised physiology of different cosmological diagrams. Hierarchy, symmetry and organs, the parts are interdependent and difficult precise division create a mandala, or a formal to separate. The result can only be understood signature of universal order2. Boundaries are a holistically. Organic growth is incremental and prerequisite for settlement because a city’s limits opportunistic, yet driven by “genetic” imperatives. define a sacred precinct — a safe, stable place in So picturesque, vernacular forms are often favoured which to dwell. Perfect geometry invokes divine and urban designs refer explicitly to their contexts. favour and protects citizens from catastrophe. In this Having reached maturity, the organic city establishes conceptualisation, a great earthquake might indicate a stable equilibrium with its environment. It adjusts a flaw in the pattern or a failure to observe the rituals to external disturbances and responds to trauma by that empower architectural relationships. regenerating damaged urban tissue.

The city is a machine The city is a text The machine provides a more contemporary meta- Cities may be read as historical texts. They provide a phor for urban form. The mechanical city has no palimpsest on which each generation of inhabitants meaning other than its overt function. The plan is leaves its trace. Because the city grows by superim- configured to optimise production and public heath. position and accretion, urban fabric is layered and Ideal layouts are either linear or orthogonal because rich with meaning. The continuous, linear structure these facilitate the commodification of land. Towns of the narrative projects forward in time, as well as appear to be a logical expression of circulation, backward. Permanent features of the city are a exchange, standardisation and an orderly separation tangible link with the future and the past. The most of activities. They grow by replication and addition

55 Wellington After the Quake durable urban artifacts are the city’s plan and its have in mind while we plan for Wellington after the monuments, so it is these elements that “constitute” quake. a city and comprise its “memory”. Wars, fires, floods and other catastrophic events need to be Despite these concepts, the process of urban devel- recorded. They represent important chapters in the opment is most often an empirical one. Expedient, “biography” of the city. However, reconstruction fragmentary and incremental, city form frequently should never completely erase the place’s previous responds to circumstance rather than a single perfect identity3. idea. Yet natural disasters suggest a different kind of growth. Catastrophic change promises to deliver an There are other concepts to choose from. View the urban tabula rasa — effectively a new civic founda- city as an information system and our whole envi- tion without context or compromise, a blank slate on ronment appears as a collection of signs. Examine which a contemporary vision of the ideal city can be the diversity of modern lifestyles and urban culture mapped out. The seductive prospect is that, after the seems to occupy a “heterotopia” — a kind of giant quake, Wellington might be reinvented. theme park where a polyglot populace plays out its fantasies4. Leap into cyberspace and the city van- If we could just start over again, a single compre- ishes altogether. Software replaces hardware and the hensive plan might produce an urban utopia: a compelling prospect of virtual reality takes hold. bicultural city that truly expresses an emerging, indigenous South Pacific identity, a rational city that None of the conventions are static. Ideas mutate and optimises late 20th century technology or an eco- sometimes become their opposites. Witness the logical city that achieves a stable, sustainable wilderness and the park. Over a thousand years, the relationship with its environment. More equitable, place of nature in the city has been reversed from a more efficient, more comfortable, more beautiful, chaotic, menacing “outside” to a benign refuge for more coherent: in the past, these criteria have natural order. Consider the machine image. Once it informed ambitious redevelopment proposals represented dynamism, modernity and material following wars, fires, floods and earthquakes6. welfare. Now, it has become a symbol of alienation and control. At the same time, the city of production Mountains and maps: immutable has been replaced by the city of consumption, an relationships resist comprehensive entirely new suburban landscape that maximises change accumulation of goods and expenditure of energy5. These transformations remind us that the city is However, few of these grand schemes have been constantly being reinterpreted. realised. Even if we could all agree what paradigm should be applied, the city’s physical character Few cities conform exactly to any of these models. would resist fundamental change. A thorough Try to understand Wellington’s structure and reinvention of the city is bound to be frustrated identity as a “mandala” or a “mechanism”, “tissue” because the most significant determinants of urban or “text”, and we would quickly find that none of form will survive a severe natural disaster: land form these rival paradigms are mutually exclusive. All the and the city plan. These two underlying and interde- metaphors are deficient. Yet, each benefits the pendent features imprint the urban environment with analysis. The currency of all four models, even in a permanent structure. the contemporary world, reveals the multiple purposes and modalities of the urban environment. In fact, Wellington’s first plan did represent a kind 7 A single explanation is bound to be deficient. If we of ideal . More utilitarian than utopian, the 1839 treat the city exclusively as a system for production street map appears to us as a caricature of a city. Yet and exchange, we neglect its role as a mnemonic it captured the “Idea of Wellington” as the colony device and a repository for culture. If we assign was conceived, in London, by Edward Gibbon value wholly in terms of aesthetic composition, Wakefield and the New Zealand Company. Occupy- individual sensory experience or personal identifica- ing an artless rectilinear grid, the notional town tion with place, then the importance of property as a displayed all the mechanical precision of a military commodity may be overlooked. These competing camp. Indeed, the boundaries of the settlement were paradigms jointly reveal the true complexity of the demarcated with forts and broad defensive terraces. city and it is the composite picture that we must Fifty-nine squares locate public institutions and places of commerce, everything from the “Presi-

56 Christopher McDonald dent’s Palace” to a “Billingsgate Fish Market”. In forces. During the recent past, geological processes these names, we can read the company’s determina- have raised beaches and helped to drain swamps. tion to recreate the familiar, civilised landscape of Yet, even the most catastrophic event will have an the motherland. We can also identify bold aspira- imperceptible influence on the contours that shape tions for the city’s future role as the capital of a Wellington. nation that is both secular and republican. But the real focus of this settlement is commerce, for the Mein Smith’s final map of Wellington is little more plan gives greatest emphasis to docks, markets, than a “proto-grid”, a crude framework for private exchanges and the kinds of public amenities that will speculation and civic enterprise. Undifferentiated ensure a healthy, industrious population. one-acre parcels made no provision for the explicit functional specialisation that had characterised the For our purposes, the map’s most instructive feature earlier town plan. Whole elements of infrastructure is that this ideal plan was never put into effect. In appear to be missing: docks, railways, civic institu- their careful enumeration of civic spaces, the tions. For 150 years, planners and property develop- colony’s planners failed to account for the untamed, ers have attempted to correct the map’s deficiencies unforgiving character of the land itself. On paper, by implementing piecemeal alterations and addi- their ideal settlement occupies a flat, featureless tions. Alleys and cul de sacs accessed the centres of plane and its streets are neatly bisected by a benign, large blocks. The original uniform matrix of streets navigable river. But this abstract setting bore little was overlaid with a clearer hierarchy of major and resemblance to the perilous marshes, braided minor routes. Reclamations erased the natural channels and stormy foreshore of the Hutt Valley, shoreline, extending broad ledges of new land far where the New Zealand Company’s ships first out into Lambton Harbour. However, Mein Smith’s anchored. map remains persistently intact. It has provided the datum for one and a half centuries growth and it will Once these topographical imperatives became be a reference for all future change. apparent, the official town site was abandoned in favour of Lambton Harbour and Te Aro Flat. So the city’s plan introduces a second kind of Here, rugged terrain made a nonsense of the tidy permanence. The intricate patterns formed by orthogonal plan. In 1840, the first settlers were property lines and public rights-of-way will escape already pitching their tents on the beach as the destruction because they have an abstract existence. colony’s resident Surveyor General struggled to Yet these coordinates are potent generators of urban locate a sufficient number of private lots. Captain form, comparable in their effects to the natural William Mein Smith handled this difficult and features of a site. In a sense, cadastral surveys urgent task with great expediency. On his final plan, construct a phantom image of the city and, even it appeared as though the original orderly grid had though all physical boundaries may be destroyed, been shattered, then hurriedly reassembled. Apart these legal descriptions will persist and will be from a neatly inserted shipping basin, only a handful reactivated following a disaster. of open spaces remained within the grid. An irregular elevated site was designated for government Mosaics, not master plans: informal purpose, but this was the only sign of the settle- order in an overgrown seaside town ment’s pretensions to being the colony’s new capital. The town squares have disappeared, as So it is folly to anticipate a radical and systematic though the brute compressive strength of the terrain reorganisation of Wellington after the quake. Master had squeezed all remaining voids out to the perim- plans will fail because immutable relationships eter of the platted area. Here, on the steepest slopes control form and space. However, there is another surrounding the city, public open space coalesced as constraint on sweeping innovation. Expansive a broad greenbelt8. urban designs, in the grand manner of Burnham or Olmsted9, are doubly inappropriate here because As we contemplate Wellington after the quake, the Wellington is a complex product of idea and circum- settlement’s false start is significant. It reminds us stance10. The casual mood of this city favours that landform predetermines much of the character incremental change, improvisation and a picturesque of our urban environment. This terrain is massive aesthetic rather than a single dominant motif. and enduring. Far from being threatened by earthquakes, our topography is the product of seismic

57 Wellington After the Quake

Everywhere, tight folds in the terrain separate places Some buildings are indispensable. Not because they from one another or force unexpected encounters. house vital services but because they help to define a All the city’s natural parts are finite and the harbour sense of place. Parliament House, the Old Govern- provides the only common focus. Wellington’s ment Buildings, the Buckle Street Carillon, St cultural and commercial life is concentrated at the Gerard’s Monastery, perhaps the Railway Station margin where hills and water meet. A narrow ribbon and the Overseas Passenger Terminal: all these of retail frontages and high-rise office blocks trace elements contribute to the essence of Wellington. the original beach front, so the form of the city is Like natural landmarks and the street plan, they both compact and attenuated. Activity is compressed organise our experiences and influence our image of into a linear structure, which defies the formation of the city. As the capital’s primary urban artifacts, a single unchallengeable centre. It is a city of edges these structures are identified by size and promi- and ridges, seams and corridors, viewshafts and nence or unique form. More importantly, their villages. Its narrow streets are lined with miniature architecture exhibits exceptional integrity, richness replicas of European and North American architec- or craft. These are the attributes that finally denote a ture. The result is hybrid and impure. The city has singular presence within the general fabric of the not been conceived as an elegant national capital, city. Quality assigns these buildings their role as nor built as a diagram of power, nor constructed monuments. logically as an instrument for industry and commerce. Instead, Wellington resembles a rambling, One definition of “monument” is a written record. overgrown seaside town. Applied to architecture, the word suggests an enduring object that commemorates an event or This city is composed like a collage11. Fortuitous celebrates an ideal. Whether this is intended or not, juxtapositions are the source of its charm. Precise symbolism always becomes the principal function of order is always tightly circumscribed and the focus such a building. However, a monument seldom of attention often shifts to boundaries or fields of remains static as a register of history. Although they interference where one physical condition meets help us to remember, monumental buildings are another. Because Wellington is already fragmented, constantly being reused and reinterpreted. Because the place tolerates further contrast and remains of their permanence, they attract new uses and receptive to overlays and insertions. contemporary meanings. In this way, monuments have a special catalytic effect within the urban This is exactly how redevelopment will occur environment. They structure time, as well as space. following a major earthquake. Experience tells us They represent the past, but their certain presence in that the damage will be severe but highly localised. the future city also projects us forward12. Pockets of the city will be razed, although isolated structures will survive unscathed. Elsewhere, a If memories resided in a handful of grand public single building may collapse while its neighbours all edifices, these could be secured against destruction remain intact. Whole city blocks will be rebuilt and or reinstated following a natural disaster. Continuity perhaps entire districts. But the threshold between would be assured. However, the city counts several new urban fabric and old will never be far away. hundred items on its inventory of heritage buildings. “Great quake” neighbourhoods or “recovery-style” All these structures possess uncommon qualities. residences may appear distinctive, but they will join Each has survived generations of change. Every the existing mosaic of “Victorian” and “Edwardian”, heritage building acts as mnemonic device and a “pre-war” and “post-modern”. point of reference. Sometimes, their significance is known only to a small constituency of locals. Often, Remembering Wellington: architectural such an object triggers the private reminiscences of a amnesia after the quake single individual. These buildings do not qualify as civic landmarks or the instruments of state rhetoric. So, grand plans disregard the mood of the city and They are not “monumental” in the conventional the mode of recovery. From an urban designer’s sense of the word. Yet, each time a venerable perspective, this means that the risks and opportuni- structure is destroyed, the loss will provoke a ties associated with a major earthquake need to be personal sense of grief and introduce a kind of well contained. In fact, the most vulnerable elements collective amnesia. In a small way, the memory and of urban identity are only revealed when Wellington personality of the city is erased. is examined at an architectural scale.

58 Christopher McDonald

After the quake, those who rebuild Wellington will Catastrophic change in context: a single want to retain minor monuments as well as major positive vision of a possible city ones. But they will need creative conservation It is tempting to try and reinvent Wellington in this strategies to do so. Some buildings will retain their way. But we need to keep catastrophic change in authority as ruins. Others, partially demolished, may context. A comprehensive blueprint for the city be incorporated as fragments into new construction. already exists. The strategic plan identifies broad Elsewhere, it will be sufficient to carefully re- goals and long range objectives. An urban design occupy a site so that the locus of an event or an idea strategy focuses on potential amenity in public is maintained. All these practices will help to spaces. A heritage strategy protects features of preserve the identity of the city. cultural and historic importance and the district plan seeks to maximise the benefits of private property Rethinking the reclamations: scenarios development. for the city’s soft sediments Each document is the product of research, negotia- Mountains, maps and monuments: the permanent tion and review, which cannot be concluded until features of Wellington’s urban form are compelling. controversial policies have been challenged. For They structure growth, but they do not preclude these reasons, the new district plan will be at least change. Transformations will occur and, with a little four years in gestation. The time and expense are imagination, it is possible to find promising opportu- justified because issues are complex, stakes are high nities for Wellington after the quake. As an example, and expectations are diverse. The city is a scarce designers might consider the soft sediments that resource and competing claims need to be resolved surround the harbour. These include natural deposits so that all citizens have confidence in the way it is and new land that has distanced the Capital’s managed. commercial spine from the water’s edge. Some vigorous shaking here may provide us with a second Such careful deliberation will be impossible follow- chance to create an intricate, elegant interface ing a major earthquake. Choices will be expedient between city and sea. rather than visionary. Amid chaos and destruction, the first impulse will be to return the city to its In this scenario, Museum of New Zealand becomes former state, literally to recover what has been lost. an island. Tall ships tie up on Lambton Quay at the Midland Park Marina. Liquefaction causes sections We can prepare for calamity by having sound, of the container terminal to slip into the harbour. popular, well understood urban design policies in Fortuitously, the awkward southern edge of the place long before disaster strikes. However, the reclamation is reconfigured to follow a gentle curve. implementation of these proposals should not be Planted with norfolk pines and pohutukawa, this deferred until a “doomsday scenario” comes into becomes a popular esplanade and completes the effect. Plans for a better city deserve to be actioned chain of recreational spaces stretched around the immediately. Although a major tremor will leave its inner harbour. Wellington’s ancient stream beds mark, those who survive the catastrophe will inhabit reappear, first as trails of destruction, then as a series a familiar place. They will recognise many of the of leafy, linear parks or charming little canals that same constraints and opportunities that frame cut across Te Aro’s street grid and stitch together the contemporary objectives for urban form. Because Town Belt, the Golden Mile and Lambton Harbour. this continuity is assured, the same positive vision of The city’s financial core, which has drifted from our city’s future needs to inform incremental change Featherston Street to the Terrace and lately towards and recovery after the quake. Willis Street, returns to the nexus formed by Lamb- ton Quay and Queens Wharf. As aging office blocks are demolished, developers match the most strategic Notes and references sites with larger, more efficient buildings. These 1. Three of these paradigms are based on Kevin endow the Central Business District with a more Lynch’s summary of normative theories for city romantic skyline and the silhouette of slender new form; see Kevin Lynch, Good City Form (Cam- towers provides a confident signature of the city’s bridge, Massachusetts, 1981) pp 71-98. recovery. Official memorials are also built. Among 2. The literal definition of a mandala is a symbolic them is Wellington’s first city museum, where circular figure that serves as a religious symbol virtual reality recreates vanished streetscapes. of the universe (Concise Oxford Dictionary).

59 Wellington After the Quake

3. Aldo Rossi refers to the city as the “collective memory of its people” and quotes Maurice Halbwachs’ La Memoire Collective as the source of this idea; see Aldo Rossi, The Architecture of the City (Cambridge, Massachusetts, 1982) pp 130-131. 4. The term “heterotopia” was coined by Demetri Porphyrios. Charles Jenks uses a related term “heteropolis”; see Charles Jenks, Heteropolis (London, 1993). 5. Charles Leven characterises the metropolis of the twenty first century as a “new city ... determined spatially to maximise consumption”; see Richard Louv, America II (New York, 1985) pp 45-46. 6. Christopher Wren’s plan for London after the Great Fire and Daniel Burnham’s proposals for San Francisco are famous examples. Burnham prepared his design a year before the 1906 earthquake. But after the disaster, his scheme was promoted as a blueprint for reconstruction. 7. This plan was drawn by Samual Cobham at Newgate Street, London. The title of some editions refers to the town as “Britannia”. 8. Daniel Burnham and Frederick Law Olmsted were both exponents of the “City Beautiful” planning movement in the United States at the turn of the century. 9. Ibid. 10. Donlyn Lyndon defines architecture as “a setting for the meeting of idea and circumstance”; see “The House of the Mind; Houses by MLTW” in Yukio Futagawa, Houses by MLTW (Tokyo, 1975). 11. “Collage city”, as used by Colin Rowe and Fred Koetter, has a distinct meaning. It refers to a combination of traditional and modern forms in the contemporary city; see, Colin Rowe & Fred Koetter, Collage City (Cambridge, Massachu- setts). 12. Aldo Rossi articulates many of these ideas in “Monuments and the Theory of Permanences”; see, Aldo Rossi, The Architecture of the City (Cambridge, Massachusetts, 1982) pp 57-61.

60 Discussion Rebuild? Where?

ohn Blakeley (Centre for Advanced Engineer- because insurance typically does not cover the ing) asked whether there was a need for a landowner’s investment in the land. J single lead agency with the responsibility to co-ordinate reconstruction. He also asked whether it Ross Cuff (Robins NZ Ltd) asked whether, in view is possible to reconcile the need for a lead agency to of the importance of insurance for financing recon- co-ordinate reconstruction with a non-interventionist struction, the insurance industry in the US had been government philosophy in view of the devolution of brought into the planning process. Steven French government assets that had taken place in the last replied that federal government sponsored earth- decade and the prevarication in the earlier panel quake insurance contains mitigation as a component, discussion about where responsibilities will lie. and a local authority must have an earthquake Steven French replied that the Los Angeles Recov- response plan in use in order to participate. ery and Reconstruction Plan (1994) included recommendations to guide both emergency response David Hopkins (Kingston Morrison) commented that and reconstruction activities. While most recommen- there appeared to be an issue of inflexibility in dations for response had been adopted, many decision making after an earthquake disaster with recommendations for reconstruction powers were the view being taken that people should not move deleted for the sake of expediency before the plan and this transcended all agencies. He suggested that could be adopted because of the domination of leadership was needed to either encourage people to market forces philosophy. Hence, although this plan stay or to relocate. Dennis Mileti said that the is interesting, it is not necessarily a model to follow. evidence in the USA suggests that no disaster has However, it would be possible to have a redevelop- led to people moving into or out of that area, except ment agency involving the private sector as a lead temporarily. He observed that seeing people move agency that is not completely incompatible with a out of the area will not necessarily motivate others to free market response. do the same. There is no case of hazard or disaster being a cause of migration, except for construction Chris Henri (Insurance Council of Australia) noted workers. that the problem for Wellington is that a really large earthquake is needed before the layout of the city Stuart Macaskill (Wellington Regional Council) can be replanned. The Newcastle earthquake was too commented that individual people react differently small to realise planning ideals. He said that oppor- to knowing the hazard zoning where they might live tunism in reconstruction could be an enemy or a and asked how this should be handled by local friend. Regarding the issue of not putting people government organisations. Dennis Mileti stated that back in harm’s way, he said that the Australian hazard zoning seemed to have little effect on how government had been quite inflexible when the case people perceived risk or on their movement — had been put to them for a joint project with the people do not perceive that the hazard will happen private sector. He wished to comment on Steven while they are there. Steven French commented that French’s statement that insurance companies tend to every time local government makes a zoning put people back on the same site and that more decision, property values are affected, so local flexibility is needed. In Australia, insurance compa- government is already involved in this issue. If a nies do make some allowance for relocation, but local authority knew of an area susceptible to they do it on an individual claim basis. Hence, to liquefaction and approved an intensification of its relocate people on a wholescale basis following a use, he wondered who would be liable. Trevor disaster would be extremely difficult. In any event, Roberts (Earthquake Commission) considered that most people are under-insured, which militates there was a trend to extend local authority liability against relocation. Steven French said that his (Hedley Byrne v. Heller 1964, Mount Albert comment that the insurance industry tends to put Borough Council v. Johnson 1979). Local authori- people back on the same site is not necessarily a ties were liable for mis-statements and could be criticism of the insurance industry. Land value will expected to be liable for advice they gave, bearing in be an inhibiting factor against shifting people mind the information they had. Hence, the more that

61 Wellington After the Quake local authorities record hazards, the more they expose themselves to potential liability claims. Stuart Macaskill commented that the legal position is clear for flood risks, but not so clear for earthquake risks.

Ruth Norman (Auckland Regional Council) commented that as communications technologies improved, businesses might take the opportunity to relocate away from vulnerable areas. She said that if jobs are moved, people would be expected to move as well and asked why this does not happen. Chris McDonald replied that this considered mechanical processes only. People tended to stay where they are, even if logic suggests they should move elsewhere. He said that Wellington had a symbolic role too, with many companies and other organisations wanting to be in the same place as central government.

62 Hal Cochrane

Economic and Social Framework

63 Wellington After the Quake

64 Hal Cochrane

The economic impact of earthquake disasters

Hal Cochrane

Professor of Economics and Director of the Hazards Assessment Laboratory, Colorado State University, Fort Collins, Colorado

with the assistance of Dennis Black and Jerry Steenson, Hazards Assessment Laboratory

Earthquakes conjure up images of physical destruction. There are, however, more subtle losses that spring from this destruction: loss of critical facilities, both private and public, produce economic dislocations that induce unemployment in sectors not directly damaged by the event. Most disasters cause some form of supply disturbance that ripples forward to demanders of critical products and backward to the suppliers of raw and semi-finished ingredients. A method for estimating these losses is discussed and applied to the 1995 Kobe and the coming Wellington earthquakes. The results suggest that when scaled for the size of the two economies, the Wellington earthquake would cause losses 10 to 20 times larger than what Japan will experience as a result of the Kobe earthquake.

Introduction economic dislocations that are anticipated after a Kobe-like earthquake. This perpetual consumption and reproduction of capital affords the explanation of what has These two points of view are not simply strawmen so often excited wonder, the great rapidity offered up to make interesting reading; they reflect a with which countries recover from a state of school of thought that holds that economic recovery devastation, the disappearance, in a short from disaster is a foregone conclusion and, if time, of all traces of the mischiefs done by anything, a disaster serves to revitalise economies. earthquake, floods, hurricanes and the This paper is intended as the counterpoint to this ravages of war. perspective. I will show that disasters, rather than (Mill 1909, p. 74) stimulating growth, induce costly economic dislocations that add to a nation’s debt burden. The pros- When asked during his presidential campaign last pects for a rapid recovery from a truly catastrophic summer whether Mexico wasn’t relying too heavily earthquake are illusory. If short-run regional gains on short-term investment that could flee the country exist at all, they are purchased at the expense of at a press of a computer button, Mr Zedillo had others, either our children who inherit additional replied that, as far as he was concerned, “Money is federal debt, or those living elsewhere who suffer money” (Wall Street Journal, 3 January 1995). spending cuts or the burden of additional taxes.

If Mill and Zedillo are correct, there is little a This paper begins by critically reviewing the very macroeconomist can contribute to the subject of this limited body of literature linking disasters and the conference; society will quickly rebuild (Mill) and macroeconomic performance of small open econo- the economic fallout from sudden shift in investor mies. Several reasons are offered as to why empiri- sentiment is unimportant (Zedillo). Clearly, modern cal studies have failed to detect the effects of economic systems are a far cry from the mid-19th disaster on economic growth, trade balances and century British economy Mill analyses in his prices; counter evidence is provided. The anatomy Principles. It is puzzling why President Ernesto of economic disruption, including the role of debt, is Zedillo, a Yale-trained economist, would discount discussed; the resultant framework is used to the risks of borrowing “short” and investing “long”. evaluate the economic consequences of earthquakes As Mexico has sadly discovered, investors are a in both Kobe and Wellington. Lastly, preliminary capricious lot; confidence once lost is only regained estimates of indirect damages from the two events through austere and costly fiscal and monetary are contrasted in order to gain a clearer perspective restraint. Most alarming is the fact that Mexico’s regarding the risks New Zealanders face. financial collapse was triggered by a series of political events, none of which engender the real

65 Wellington After the Quake

A critical review of what others have •Gross domestic product — “natural disasters, found especially sudden ones, do not lower the growth rates of GDP and that, if anything, they might I am aware of only two in-depth studies involving improve them.” (p. 67) the macroeconomic effects of disaster in the context of open economies. They are the series of disaster •Price level — “Thus, it can be concluded that as reports produced by the United Nations Commission a rule there appears to be no important lasting for Latin America (ECLAC) under the supervision effect on inflation caused by natural disasters.” of Roberto Jovel (1989) and a recently published (p. 67) book about the political economy of large natural •Gross fixed capital formation — “as a rule, the disasters with special reference to developing growth rate of gross fixed capital formation countries by J M Albala-Bertrand (1993). Both significantly increases in the impact year and consider macroeconomic issues, but neither provides regains pre-disaster levels afterwards.” (p. 70) a very rigorous method for sorting out the effects of disaster from the ongoing changes that may have • Manufacturing — “the growth of manufacturing happened if the disaster had not occurred. remained rather unchanged...” (p. 72) • Construction — “ the growth rates of construc- According to Jovel’s analysis of the social and tion output are positively affected by natural economic impact of natural disaster, indirect effects disasters and even more so when they happen to include: be earthquakes.” (p. 77) •a reduction in economic growth; • Public deficit (surplus) — “there may be no • an increase in the public sector deficit; and important increase in the public deficit on account of the disaster situation alone.” (p. 79) •a deterioration in the balance of payments position due to a fall in exports and a rise in •Visible trade deficit (surplus) — “There is a clear imports. and sudden rise in the trade deficit on account of the disaster situation.” (p. 81) He goes on to point out that post-disaster reconstruc- • Reserves — “the worsening of the trade balance tion comes at a price. It results in a reassignment of did not involve losses of reserves.” (p. 83) existing resources and internal savings, a reorienta- tion of existing bilateral or multilateral loans, and/or • Capital flows — “there is a clear positive change securing of additional external financing (Jovel, in capital flows when disasters strike and that 1989, p. 144). Unfortunately, Jovel offers little helps to explain why increases in the trade deficit empirical evidence as to how significant these do not translate into a deficit in the balance of growth impacts may be. Just as important, the payments.” (p. 84) evidence that such studies glean from past events • Rate of exchange — “None of these cases here fails to adequately isolate the effects of the disaster considered seems to have devalued because of from underlying and ongoing trends. the disaster situation alone.” (p. 86) In contrast, Albala-Bertrand (1993) attempts to isolate the effects of the disaster from the underlying Why indirect losses have been difficult problems small open economies routinely face. He to detect correctly points out that a simple pre- and post- On the surface, it would appear that the foregoing disaster analysis is likely to produce erroneous observations point to the conclusion that macro- results. Most developing countries have sluggish economic effects are minimal or nonexistent. This economies that are plagued by debt problems and would be unfortunate for two reasons. Firstly, the high unemployment. It would, in his view, be more tests Albala-Bertrand used were very crude. Sec- useful to contrast the performance of disaster ondly, he concludes that since the disaster and no- stricken countries with the performance of those disaster economic paths appear similar, then dam- spared damage. Albala-Bertrand analyses these two ages must have been minimal. This too may be in groups to see if they differ with respect to pre- and error, in that a small change in the rate of economic post-event changes in economic performance. The growth could produce lasting and large impacts. following summarises his findings:

66 Hal Cochrane

In any event, it would be very difficult to detect In summary, it is very dangerous to try to measure indirect damage by simply focusing macroeconomic secondary loss without first separating the effects of performance indicators on the year of the event or the disaster from the effects of reconstruction. the year after the event. Losses can be spread over time and over regions. What is needed is a solid conceptual framework to The pitfall of relying on a single myopic indicator of account for losses; the anatomy of indirect loss loss is revealed in Figure 1. Figure 1a shows the true follows. measure of direct and indirect loss. Output in the economy ratchets downward after the event. How- Disaster: the anatomy of economic ever, as Figure 1b shows, credit-financed reconstruc- disruption tion tends to produce “bubble employment” for a relatively brief period. The region is, however, left Natural disasters conjure up images of physical with debt overhang that will eventually have to be destruction — buildings that have either collapsed repaid. It is this repayment that causes the economy due to ground motion or have been swept/blown to return to the lower growth path. In restricting the away by waves and wind. There are, however, more analysis to a brief period after the event (one to five subtle losses that spring from this destruction: loss years), analysts have produced a more optimistic of critical facilities, both private and public, produce assessment of damage than is warranted once the economic dislocations inducing unemployment in stimulative effects are stripped away. sectors not directly damaged by the event. Most disasters produce some form of supply disturbances The foregoing discussion helps explain why regional that ripple forward to demanders of critical products secondary losses are so difficult to detect; they may and backward to the suppliers of raw and semi- be displaced geographically and over time. This finished ingredients. Input-output methods, the most important point is underscored in Jovel’s assessment commonly utilised tool for tracing inter-industry of indirect damages: linkages, provide little guidance as to how an economy unbalanced by disaster will restabilise. The Thus, depending on the size and degree of the approach presented below addresses this critical diversification of the affected country’s point. It is based on a newly developed methodology economy, the secondary effects of natural embodied in the National Institute for Buildings disasters include: a reduction in economic Standards (NIBS) Standardized Earthquake Loss growth and the improvement of social Estimation Procedure, hereafter referred to as the conditions in general; an increase in the NIBS Indirect Loss Model. public sector deficit because of unforeseen emergency relief, rehabilitation and reconstruction expenditures and reductions in tax Forward and backward linkages revenues; a deterioration in the balance-of- Earthquakes may produce dislocations in economic payments position due to the fall in exports sectors that do not sustain direct damage. Activities and the increases in imports of equipment that are either forward-linked (rely on regional and materials for relief, rehabilitation and markets for their output) or backward-linked (rely on reconstruction ... (Jovel, p. 144) uct d

ro measured growth P c i omest D (a) year of disaster (b) year of year after disaster disaster ross Gross Domestic Product G

Time Time

Figure 1: (a) Pure direct and indirect loss and (b) temporary effects of rebuilding

67 Wellington After the Quake a regional source of supply) could experience example provided in Figure 2, firm B no longer interruptions in their operations. Such interruptions requires inputs from A, then A may be forced to are called indirect damage. The extent of these scale back operations. As in the case of forward- losses depends upon such factors as the availability linked losses, the affected firms may be able to of alternative sources of supply and markets for circumvent a weakened market by either finding products, the length of the production disturbance alternative outlets (exports) or building to inventory. and deferability of production. Figure 2 provides a highly simplified depiction of how the direct The higher rate of unemployment caused by direct damages induce indirect losses. damages and subsequent indirect factory closures could cause normal household demands to erode. In this economy, A ships to B, and B to C. C However, it is more likely that the receipt of disaster supplies households with a final product and is also assistance, unemployment compensation or borrow- a supplier of inputs to A and B. There are two ing would buoy household spending throughout the factories producing product B, one of which is reconstruction period. Evidence from recent events destroyed in the earthquake. Indirect damages occur (Hurricanes Andrew and Hugo, the Loma Prieta because: earthquake and the Northridge earthquake) confirms that normal household demands are only slightly •direct damage to production facilities and altered by disaster. inventories causes supply shortages for firms needing these supplies (forward linkage indirect It is important to underscore the point that the damage); disaster model(s) just discussed have the capacity to • damaged production facilities reduce their address both the contractions induced by the disaster demand for inputs from other producers (back- and the expansion accompanying reconstruction. It ward linkage indirect damage); or may turn out that, in the short run, the latter out- weighs the former, although in the long run, the •reductions in government, investment or export reverse must hold. Disasters cannot be good for demands for goods and services are caused by an economies. earthquake.

The role of international capital markets in Supply shortages and forward-linked losses propagating losses The supply shortages caused as a result of losing B Because New Zealand’s economy is small and open, could cripple C, provided that C is unable to locate it is vulnerable to capital flight. The growth of alternative sources. Three options are possible: liberalised trade has produced a free flow of capital, • it might secure additional supplies from outside a significant amount of which is so-called hot money the region (imports); (speculative funds seeking high rates of return in • additional supplies might be obtained from the emerging markets). The more speculative the undamaged factory (excess capacity); and investment climate, the more volatile exchange and borrowing rates. One need look no further than •draw from B’s inventories. Unused capacity The net effect of diminished supplies are inventories referred to as forward-linked losses, the term forward implying that the Unused capacity Imports inventories impact of direct damages is shifted B to the next stage of the production A process. A C B

Backward linked ed Demand effects and nk FD li loss rd a ss backward-linked losses rw lo Exports B Fo inventories Disasters can also produce Reconstruction indirect damages if consumer and demands producer demands for goods and services are reduced. If, in the Figure 2: Indirect losses and adjustments to lessen them

68 Hal Cochrane

Mexico’s current debt crisis to 30 30 observe hot money at work. Such exposure has the potential to produce NIG two extremely important effects. JAM Firstly, if an earthquake destroyed a significant proportion of the country’s 20 20 productive capacity, its GDP would MOR decline, and with it, its ability to ARG TRIN service debt. Secondly, cleanup and VEN reconstruction would in all likelihood Bond rate URU MX CR be financed through borrowing. BR 10 PHIL 10 Hence, debt would rise. These twin TUR CHI effects would produce a sudden IND increase in the ratio of debt to GDP, a CR - Costa Rica; CHI - Chile; PHIL - Philllipines; IND - India; TUR - Turkey; change that could spell trouble, as it TRIN - Trinidad; MOR - Moroco; URU - Uruguay; NIG - Nigeria; VEN - Venezuela did in Mexico in the 1980s and now 0 0 again in 1995. Figure 3 uses Brady 0 0.5 11.52 bond data to illustrate how credit Debt to GDP markets respond to debt. As shown, Figure 3: Yields and debt the greater a country’s indebtedness, the greater the interest it must pay to secure additional debt. A large earthquake in a point in much of this research is that a country’s small, open economy such as New Zealand’s could borrowing rate will reflect the risk international easily double the debt to GNP ratio and raise the real financiers perceive. Political instability and impru- interest rate it must pay accordingly. dent monetary and fiscal policies are often cited as causes of perceived riskiness. However, almost all Liberalised trade has also had a profound influence agree that a country’s credit-worthiness, or lack on central bank policies. The autonomy of monetary thereof, is of prime importance. The level of debt authorities has clearly eroded in direct proportion to alone may be of little concern, particularly when the growth of these international capital markets. It normalised by the size of the economy (GDP), the is no longer possible for governments to pursue stock of the country’s resources (human and natural monetary and fiscal policies without reference to capital) or the size of the export sector (trade in how these markets are likely to respond. So too, products which earn foreign exchange). Until these markets are likely to react to a sudden change recently, it has been difficult to obtain a good in the debt position of a country that has been rocked measure of the risk premium financiers attach to by disaster. Bond prices are likely to decline as these factors. However, with the advent of markets investors attach a probability of default to the specialising in the trading of developing country country’s debt instruments. As the Mexican crisis debt instruments (e.g. Brady bonds, Moody’s clearly illustrates, the central government proved to ratings) it is now possible to derive a risk function be powerless in the face of rapid capital movements. that reflects indebtedness. Monetary policy would have been ineffective in countering the ensuing recession, since printing Jeffrey Sachs’ Brookings Papers on the subject of money would simply produce inflation, thereby growth and debt underscores the importance of debt driving nominal interest rates higher and further overhang in slowing the pace of growth: eroding the value of the local currency on foreign Of all the causes of poor Latin American exchange markets. A stimulative fiscal policy would economic performance considered so far, the be equally ineffective; it would add to the country’s most significant seem to be trade and ex- indebtedness, thereby driving real interest rates even change rate policies. Put simply, the Latin higher. debt became burdensome both because of its structure (short maturities, variable interest The effect of indebtedness on a country’s real rate) and because of insufficient exports interest rates has been the subject of considerable available to service it.... Capital flight, high speculation and empirical testing (see Sachs, 1985; inflation, and perhaps, larger public deficits Sachs, 1986; Sachs and Huizinga, 1987). The key

69 Wellington After the Quake

have also contributed to Latin America’s In building the model, several critical choices had to poor performance. be made regarding post-event household spending (Sachs, 1986, p. 548) patterns, labour mobility, elasticity of supplies from the construction industry and the potential for Sach’s conclusions are clearly revealed in the capital product substitutions due to relative price changes. movements in and out of Mexico (see Figure 4). Evidence from previous disasters suggests that: Capital flight is a mirror image of the debt to GNP • normal spending patterns are not significantly ratio. altered;

An accurate loss accounting would include both •the workforce is highly mobile, particularly in direct damages to the capital stock plus direct and the construction sector; and linked employment losses, plus the shadow costs •relative prices do not change appreciably. stemming from additional indebtedness. Debt overhang not only slows rebuilding and capital Therefore, labour and construction sales are not accumulation, it produces employment effects as constrained, and normal household spending is fixed well. Either workers are paid a lower real wage and independent of current income. Given these during this transition or they will be out of work conditions, the model assesses the net excess altogether. Since the wage bill or labour’s contribu- supplies (output less the sum of intermediate and tion to production is typically a larger percentage final demands). A positive net value implies an than that of capital’s, output reductions will exceed excess supply; a negative indicates excess demand. the direct loss. The extent of the reduction depends It then attempts to resolve sectoral imbalances upon both the rise in real interest and labour’s share through a series of adjustments. If excess demand is of output. detected, the algorithm checks to see if sufficient capacity exists in a sector. Excess capacities are a The NIBS Indirect Loss Model function of the user-defined level of unemployment.

The NIBS Indirect Loss Model is a computational Excess demands are met by first utilising surviving algorithm that accounts for earthquake-induced productive capacity (including plant and equipment supply shortages (forward linkages) and demand found to be idle prior to the earthquake). If surplus reductions (backward linkages). The model is a capacity is insufficient, the model then explores the version of a dynamic computable general equilib- potential of importing and/or drawing down invento- rium system designed to rebalance a region’s ries. These options are also provided by the user and interindustry trade flows based on discrepancies are expressed as a percent of pre-event capacities. between sector supplies and demands. A complete description of the computational procedure for Disposal of excess supplies is logically similar. rebalancing the economy can be found in Cochrane Three options are explored: inventory accumulation, and Steenson (1994). exports and production to meet reconstruction demands. As in the case of the previous options, A direct shock is introduced into the indirect loss model by adjusting the 30 0.8 outputs and purchases in proportion to a sector’s loss of function. Restrictions on shipments (forward linkages) and 20 0.6 Debt/GNP purchases (backward linkages) are computed and the resultant excess 10 0.4

demands or supplies are derived. The es 1E+09 first round effects are simply the direct Tim loss of function times the inputs to that 0 0.2 sector (backward links) and shipments Capital Inflow (US$) from that sector (forward links). These -10 0 first round effects produce excess 70 72 74 76 78 80 82 84 86 88 90 92 demands and supplies, which trigger a Year search for markets and alternative supply sources. Figure 4: Capital inflow — debt to GNP (US$)

70 Hal Cochrane both are expressed as a percentage and are deter- Indirect losses. The stimulus from rebuilding Kobe mined by the user. In most cases, excess supplies are will far outweigh the economic dislocations stem- not critical to the model’s operation, particularly ming from the closure of its port or dislocations when reconstruction spending looms large. Much of within Kobe’s manufacturing sector. I say this the excess is drawn into the rebuilding process. because the $100 billion price tag to rebuild Kobe is equivalent to the sum of one year’s gross fixed After completing the first round of sectoral adjust- investment in all of Japan (public, private residential ments (changes in output to meet net excess de- and private nonresidential). We have learned from mands), the algorithm recalculates the required experiments with the NIBS Indirect Loss Model that shipments from and to each of the economy’s such a large stimulus would overwhelm the negative sectors. Production, imports and exports are again consequences stemming from disruptions of inter- adjusted to bring markets back into balance. The industry shipments (particularly given that the process of reapportioning production diminishes the economy is mired in a recession and significant excesses detected in the previous round of calcula- amounts of excess capacity exist). Some of the tions, but introduces new, albeit smaller, imbalances. adjustments discussed earlier are emerging as Each alteration of output signals a new set of important factors in dampening the earthquake’s forward- and backward-linked requirements. The disruptive effects on interindustry shipments. adjustment process continues until the economy is Sealand, a major shipper utilising Kobe’s port, has rebalanced. already taken steps to find alternatives, such as diverting vessels to berths in Tokyo, Yokohama, The model is made dynamic by tracking the amount Nagoya, Naha and Okinawa, and chartering self- of reconstruction occurring each period and then sustaining cargo ships that have their own cranes permitting each sector to expand production accord- (Nikkei Weekly, 30 January 1995, p. 4). In other ingly. It is resolved period by period until recon- cases, demands are being met by drawing down struction is completed. Indirect losses are computed inventories. Such was reported by the Kobe-based over the entire period and discounted accordingly. Sumitomo Rubber Industries Ltd (Nikkei Weekly, 30 January 1995, p. 17). Kobe The NIBS Indirect Loss Model was utilised to The Hanshin earthquake, centred near Kobe, of 17 provide a rough assessment of indirect losses that January 1995 killed over 5000 people, injured nearly the Kobe earthquake might engender. Direct dam- 25,000, left 330,000 homeless and will disrupt the ages by economic sector along with estimated repair region’s factories, utilities and ports for up to a year times, pre-event excess capacity and reconstruction (Nikkei Weekly, 23 January 1995, p. 1). Estimates of financing were input to the algorithm. The results, both direct and indirect losses remain highly specu- shown in Table 1, indicate that the rebuilding lative. Damages to structures have been assessed at stimulus will be substantial, so much so as to cancel anywhere between $30 billion and $100 billion. the effects of direct and indirect damages. The net Estimates of the impact on the Kobe economy are loss to the Japanese economy is projected to be a even more wide-ranging, some placing the figure at mere $1.05 billion. Indirect construction gains are 5 to 10 times the direct loss: $129 billion. Pure indirect damages, after eliminat- More sobering was the assessment by the ing construction gains, are $41 billion. Japanese Chamber of Commerce and Industry President Kosaku Inaba that, taking Table 1: Summary of projected Kobe into account the losses wrought by the losses/gains disruption of economic activity, the quake will end up costing 40 trillion yen ($400 Loss/gain category Discounted amount billion). (- loss, + gain) during reconstruction (US$ billion) (Nikkei Weekly, 30 January 1995, p. 4.) Direct loss -89.44 Indirect loss/gain 88.39 Clearly, it is early to be projecting economic conse- Total loss -1.05 quences for the Japanese economy, but even at this Construction gains 129.64 stage of the rebuilding process, a few observations Pure indirect -41.25 seem warranted.

71 Wellington After the Quake

Short-term financial losses. It appears that the disaster. Both cities are important ports; their financial markets in Japan have grossly overreacted economies contribute a significant proportion of to the event. The Nikkei lost 8 percent of its value their respective nation’s gross domestic product over the course of a 10-day period. This is clearly a (nearly 10 percent). Soft soils and liquefaction will few orders of magnitude greater than the most accentuate damage, as it did in Kobe. Reconstruction liberal of damage estimates. One would expect times and the pattern of damage is likely to be financial markets to internalise the direct damages, similar. However, this is where the similarities end. but such a large adjustment seems unwarranted. The As will be shown shortly, the relative magnitude of declines appear to be broad-based, indicating that loss, ability to rebuild and access to financial investors gave little consideration to the nature of resources are all vastly different. As a result, the the losses. Kobe Steel lost 7 percent of its value, the coming Wellington quake could pose problems for same as Nippon Glass and the Bank of Tokyo. Auto New Zealand far surpassing what the Japanese manufacturing stock lost from 8 to 10 percent of government faced (and will continue to face) in the their values. It stands to reason that stock traders wake of Kobe. would discount for the effects of damage, but a broad-based sell-off seems irrational. Traders must The Kobe disaster was used as the model event that have reached the same conclusion, given that the could strike Wellington. As in the analysis previ- market has since returned to pre-quake levels. ously described for Kobe, the expected damage However, after one month, analysts are still unsure pattern and projected time to restore loss of function of the financial toll on Kobe-based companies: were fed to the NIBS model. Direct damages were assumed to be 35 percent of the capital stock, which Most analysts are sitting on their hands is estimated to be US$29 billion (see Appendix A). ‘since there’s little concrete data available to The interest rate needed to attract international base any judgments on’ says ... Merrill reconstruction financing was assumed to double Lynch, Japan, Inc. because of the perceived default risks associated (Nikkei Weekly, 30 January 1995, p. 17) with a greater post-disaster debt to GNP ratio. The rationale for such an assumption follows from the The market seemed to behave rationally in only one previously described analysis of Brady bond yields. regard, that is in construction stocks, which rose In essence, the Wellington quake would alter New dramatically the day after the earthquake. Zealand’s image as a credit-worthy borrower. The sudden deterioration of the country’s fiscal position Longer-term and broader financial losses. The would produce a financial crisis paralleling what longer-term financial effects may be more important, Mexico has faced recently. particularly for the world capital market. The Hanshin earthquake effectively removed Japan as an The results of our assessment are shown in Figure 5. international creditor for a minimum of one to two The total loss (over the five-year reconstruction years. Given the Mexican debt crisis and the numer- period) is calculated to be approximately US$24 ous other financially troubled economies in Latin billion. It is interesting to note that direct damages America (not to mention the fiscal problems Russia amount to a relatively modest proportion of this and Eastern Europe face), real world interest rates total. More than half of the loss stems from income are likely to rise. This could forestall global eco- effects, i.e. employment lost directly as a result of nomic recovery or, worse yet, produce an economic the quake and linked unemployment. Figures 6 to 8 downturn. In contrast, the reconstruction of Kobe is break down these income effects for more detailed likely to produce a mini economic boom in Japan, a study. The total income effect shown in Figure 5 conclusion supported by the NIBS Indirect Loss reflects both the positive effects of reconstruction Model. This may be one of the most important by- and the costs of forward- and backward-linked products of the Kobe disaster — the impact of large economic dislocations. After the first 12 months, the urban earthquakes in highly developed export-based gains from reconstruction dominate; however, once economies will be shifted abroad. reconstruction is complete, at 48 months, the effect of debt repayment depresses incomes. Figures 7 and The coming Wellington earthquake: A 8 disaggregate the reconstruction effects from contrast dislocation effects. There are a number of similarities between the coming Wellington quake and the 17 January Kobe

72 Hal Cochrane

In contrast to Kobe, Welling- $2.1 Debt Overhang ton will suffer substantial indirect effects. This is due $4.0 Direct Income $10.1 Direct Damage to a number of factors. One important difference lies in the way reconstruction would be financed in the two countries. Until recently, New Zealand has borrowed $8.1 Linked Income from the international credit markets to finance its Figure 5: Composition of loss, Wellington quake (US$ billion) investments, whereas Japan has been a creditor. New Zealand would be forced to expect. Most startling, however, is the scale of loss pay a premium to add to its indebtedness; Japan (see Table 2). would not. The economies are different and the excess capacity assumed in the Japanese system was Total losses are 300 to 500 percent of New Zea- greater. Hence, the effects of supply constraints land’s annual national savings; Kobe’s loss scaled in would be more prevalent in New Zealand. proportion to Japan’s annual savings is more than an order of magnitude lower (8 to 20 percent). When What if Wellington were Kobe?: scaled according to the combined annual output of Implications for New Zealand’s Japanese factories and service industries, the ratio economy shrinks to 3 to 6 percent. It is also interesting to note that the value of Japan’s foreign assets far surpasses What if Wellington were Kobe? Given the Kobe the combined cost of reconstructing Kobe and scenario, the same ground motion, liquefaction, providing subsidies to all suffering indirect losses. design standards, etc., Wellington would sustain The trade surplus for the period 1971-1991 permit- proportionately less direct loss. This result, of ted Japan to amass savings abroad of $638 billion. In course, flows directly from the assumptions used. contrast, the sum of New Zealand’s trade deficits for Our indirect estimate of capital at risk was tied to the same period reveals a net foreign debt of $2.8 demographics; Kobe’s population is three times that billion. of Wellington, hence, the value damaged proved to be threefold as well. However, the indirect loss It is extremely important to keep these observations model suggests that Wellington would suffer in mind when attempting to generalise from Japan’s disproportionately greater indirect losses. This is due experience in rebuilding Kobe. It is highly unlikely in part to capacity considerations and differences in that the macroeconomic consequences of the the two economies, particularly the amount of Wellington quake will be as muted as one might reconstruction assistance Kobe’s residents could anticipate them to be for the Japanese economy.

0.5 0.5

0 0

-0.5 -0.5

Linked -1 -1 otal Loss (billion $) otal Loss (billion $) T -1.5 T -1.5 Direct

-2 -2 0 12 24 36 48 60 72 0 12 24 36 48 60 72 Months after the Earthquake Months after the Earthquake

Figure 6: Total loss (US$) Figure 7: Direct and linked income losses (US$)

73 Wellington After the Quake

0.5 Barro, R J and J Wha Lee. 1993. “Losers and winners in economic growth.” Paper prepared for 0 the World Bank’s Annual Conference on Develop- ing Countries, Washington, DC. -0.5 Cochrane, Hal and Jerry Steenson. 1994. Indirect -1 losses. Working paper. Hazards Assessment Labora- tory, Colorado State University, Fort Collins, otal Loss (billion $)

T -1.5 Colorado.

-2 Cohen, M J. 1993. “The economics of catastrophic 0 12 24 36 48 60 72 events.” Paper prepared for the 40th Annual Meet- Months after the Earthquake ings of the Regional Science Association Interna- tional, Houston, Texas. Figure 8: Reconstruction gains, Wellington quake (US$) Drennan, M P. 1993. “The cost of ill intentions: Measuring the economic effect of the World Trade Rebuilding Wellington will be a much more daunt- Center explosion.” Working paper. Cornell Univer- ing task. There will be no quick fixes, either from sity, Ithica, New York. the central bank (printing money) or the federal government (expansionary fiscal policy). The Jones, Barclay and Stephanie E Chang. 1993. international capital market, the primary source of “Indirect methods for estimating the built physical reconstruction finance, will not permit it, any more environment for risk and damage assessment and than it would allow Mexico to rely on central bank relief, recovery, and reconstruction planning.” money to escape the consequences of capital flight. Proceedings of the 1993 National Earthquake Conference, Memphis, Tennessee. Earthquake Based on this analysis, I can only conclude that if Reduction in the Central and Eastern United States: New Zealand’s approach to preparedness and A Time for Examination and Action, Volume I pp. mitigation remains unaltered, a truly catastrophic 593-602. Wellington quake will prove disastrous to the country’s economy. Jovel, J Roberto. 1989. Economic and Social Consequences of Natural Disasters in Latin America References and the Caribbean. United Nations Economic Commission for Latin America and the Caribbean Albala-Bertrand, J M. 1993. Political Economy of (UN-ECLAC), Santiago, Chile. Large Natural Disasters. Oxford: Clarendon Press.

Table 2: A comparison of economies and losses (all market values are in 1991 US$ billion)

Kobe Japan Wellington New Zealand Population 1.4 million 350 thousand Economy Manufacturing Government and service and service Capital at risk $117 $2-3 trillion $29.1 $300 Gross Domestic $402 $3349 $4 $39.5 Product Net factor income $2.8 $23.7 ($.2) ($1.9) Net foreign assets* 76.5 $638 -0.3 -$2.8 Total losses $100-$200 $20-30 Total loss 25-50% 3-6% 500-800% 51-77% (Percent of GDP) Total loss 8-20% 300-500% (Percent of National Savings) *Proxy measure derived by summing net exports over the period 1970 to 1991.

74 Hal Cochrane

Mill, John Stuart. 1909. Principles of Political Economy. Fairfield, Connecticut: Augustus M Kelley Publishers.

Rose, A and J Benavides. 1993. Interindustry Models for Analyzing the Economic Impacts of Earthquakes and Recovery Policies. Working paper. Department of Mineral Economics, Pennsylvania State University, University Park, Pennsylvania.

Sachs, J D. 1985. External debt and macroeconomic performance in Latin America. Brookings papers on economic activity 2. Washington, DC.

Sachs, J D. 1986. Managing the LDC debt crisis. Brookings papers on economic activity 2. Washing- ton, DC.

Sachs, J D and H Huizinga. 1987. US commercial banks and the developing-country debt crisis. Brookings papers on economic activity 2. Washing- ton, DC.

75 Wellington After the Quake

Appendix A: Indirect method of estimating capital at risk (Jones and Chang, 1993, p. 596)

There are a number of impediments to conducting a rapid damage assessment, not the least of which is obtaining an estimate of the value of capital at risk. Barclay Jones and his colleagues at Cornell University have developed an indirect method of estimating these values. By conducting an in depth survey of the built physical environment of a representative county in the United States (Sedgwick), he has been able to derive simple rules of thumb relating value to population for different classes of structures. The first two columns in the following table show the components of the classification scheme and the per capita values by component. The final two columns apply these values to the populations of Kobe and Wellington to arrive at the resultant value at risk. Per capita Wellington Kobe replacement cost 350,000 pop. 1.4 million pop. US$ 1983 US$ 1994 US$ 1994

INFRASTRUCTURE 12,426 6263 25,225 Subsurface 2877 1450 5840 Water 398 201 808 Sanitary sewer 425 214 863 Natural gas 919 463 1866 Interregional gas pipelines 470 237 954 Irrigation 29 15 59 Electric power distribution 636 321 1291 Surface 5326 2684 10,812 Highways 666 336 1352 Primary roads 2090 1053 4243 Secondary roads 2517 1269 5110 Alleys 53 27 108 Structures 1916 966 3889 Highway bridges 1100 554 2233 Primary road bridges 593 299 1204 Secondary road bridges 111 56 225 Railroad bridges 106 53 215 Pedestrian Overpasses 6 3 12 Vertical and complex elements 2307 1163 4683 Electricity 1098 553 2229 Generation 748 377 1518 Transmission 136 69 276 Distribution 215 108 436 Telecommunications 684 345 1389 Central offices 218 110 443 Cables, etc. 466 235 946 Cable television 52 26 106 Street lights 262 132 532 Traffic signals 40 20 81 Dam 126 64 256 Earthworks 45 23 91

76 Hal Cochrane

ON-SITE IMPROVEMENTS 5584 2814 11,336 Surface 5501 2773 11,167 Athletic courts and fields 125 63 254 Golf courses 55 28 112 Landscaping 491 247 997 Paving 943 475 1914 Railroad track and runways 1615 814 3278 Agriculture 2272 1145 4612 Signs — on-site 71 36 144 Signs — off-site 12 6 24 TOTAL BUILDINGS 39,738 20,028 80,668 Residential 22,527 11,354 45,730 Single family and mobile homes 19,671 9914 39,932 Multiple family and group quarters 2856 1439 5798 Nonresidential 17,211 8674 34,938 Commercial 8380 4224 17,011 Industrial 3177 1601 6449 Agricultural 811 409 1646 Other 4843 2441 9831 Government 1226 618 2489 Institutional 1841 928 3737 Fratern., & charitable 166 84 337 Religious 908 458 1843 Hospital 767 387 1557 Education 1777 896 3607 School 1274 642 2586 College 503 254 1021 TOTAL BUILT ENVIRONMENT 57,748 29,105 117,228

Appendix B: The NIBS indirect loss model The NIBS indirect loss model is a general equilibrium system which utilises the inter-industry coefficients found in input-output (I/O) tables. Supply shocks are introduced by curtailing outputs from sectors suffering damage and then recalculating the resulting excess supplies (backward links) and demands (forward links). Surviving production is reallocated iteratively until net inter-industry demands disappear. The model is not price-sensitive, but does permit import substitution and recognises that pre-disaster excess capacities could buffer the economy from the supply shock. Figure A1 provides a schematic of the model’s design.

Essential computations Direct income loss is original income times the percent output reduction due to direct damages.

Total income change is the income after the shock less the region’s original income. This measures the combined effects of direct damages, pure indirect damages, and any stimulus resulting from reconstruction expenditures.

Pure indirect income loss is post-earthquake income (without reconstruction spending) less the post-event incomes (counting the effects of direct damages on regional incomes only).

Discounting for the effects of time The recovery process is addressed by solving the model recursively, changing functional capacity as rebuilding occurs. The model is made dynamic by tracking the amount of reconstruction occurring each period and then permitting each sector to expand production accordingly. Payments for any debt that occurs are computed and

77 Wellington After the Quake

User inputs I/O transactions data Damage

Yes Yes Recalculate Find No Reduce transactions matrix Reduce No Find supplies? output output outlets?

Too Too Too little much? much Too Search for outlets Search for supplies little? • exports • imports • local firms • local firms • households • inventories END • final demand

Figure A1: Indirect loss module schematic subtracted from post-reconstruction final demands. The stream of losses are then discounted using a three percent real rate of interest. Figure A2 illustrates how function is recovered and reconstruction expenditures change.

50 AVG. 48%

40 AVG. 36% 30

20 AVG. 8% (a) 10 Function lost (%) AVG. 1% 0 012243648 Time (months)

400

300 AVG. 265%

AVG. 250% 200

100 AVG. 55%

(b) 0 AVG. -15%

Spending (% of norm) -100 012243648 Time (months)

Figure A2: (a) Restoration of function with time. (b) Change in post-event spending.

Assumptions regarding pre-existing economic conditions Tables A1 and A2 provide the values used to simulate the indirect losses for both Kobe and Wellington.

78 Hal Cochrane

Table A1: Values used for the calculations for Kobe and Wellington

Variable Value Value Rationale Wellington Kobe Additional imports 0% imp 100% imp Japan can afford to liquidate and exports 0% exp 0% exp financial assets in order to bring in additional construction and allied capacity. Inventory adjustment 0% 0% Inventories are not adjustable in either economy. Unemployment 3% 3% The earthquake is assumed to occur at a point of near full employment in New Zealand. Three percent unemployment was observed at the time of the Kobe event Discount rate 3% 3% Assumed. Total construction $10 billion $80 billion Observed. Original capacity $3 billion $36 billion Observed. Outside assistance $0 billion $80 billion Japan’s central government would assist in rebuilding.

Table A2: Loss of function for different sectors

Months after the event Economic sector 123691224364860 Agriculture 0.02 0.02 0.01 0.01 000000 Mining 0.03 0.02 0.02 0.01 0.01 00000 Construction 0.1 0.08 0.06 0.04 0.02 00000 Manufacturing 0.3 0.26 0.22 0.18 0.14 0.1 0.06 0.02 0 0 Transportation 0.8 0.57 0.34 0.11 000000 Trade 0.3 0.25 0.21 0.16 0.12 0.07 0.02 0 0 0 Finance, real estate and 0.03 0.02 0.01 0000000 insurance Services 0.1 0.08 0.06 0.04 0.02 00000 Government 0.1 0.08 0.05 0.03 000000 Construction spending 0.3 0.9 1.8 2.1 2.1 1.8 0.9 0.38 0.3 0

79 Wellington After the Quake

80 Joanne Nigg

Disaster recovery as a social process

Joanne M Nigg

Disaster Research Center, University of Delaware, Newark, Delaware

This paper takes the perspective that recovery from disaster is not merely concerned with the re- establishment of the physical or built environment; that is, community recovery should not be conceptualised as an outcome, but rather as a social process that begins before a disaster occurs and encompasses decision-making concerning emergency response, restoration and reconstruction activities following the disaster. Put another way, reconstruction is less a technical problem than it is a social one. In order for successful post-disaster decisions to be made, however, there must be an awareness of the pre-disaster conditions that create situations of social and structural vulnerability, putting some segments of the society at greater risk in the event of an earthquake than others. From this perspective, what becomes important is how those decisions are made, who is involved in the decisionmaking, what consequences those decisions have on the social groups within the disaster-stricken communities, and who benefits from these decisions and who does not.

Introduction housed, businesses can again serve customers and markets, and the infrastructure can facilitate the When we think about the immediate consequences tasks and chores that must be undertaken in both of a disaster, vivid images usually come to mind. In peoples’ and organisations’ day-to-day lives. the case of earthquakes, the images are of twisted metal that was highways and bridges, blocks of In fact, this was the approach taken by Haas, Kates, crushed concrete and broken glass filling city streets, and Bowden in the first study to specifically address heaps of brick and mortar rubble that were once this topic in 1977 in a book entitled Reconstruction homes and pancaked or collapsed structures that had following Disaster. In this influential first academic been places of employment. work to investigate this topic, they identified three phases of the post-impact period associated with While the Wellington region has not experienced the recovery. The first they called restoration, which devastation of a catastrophic earthquake in modern refers to attempts to “patch up” the damaged physi- history, similar to the one that struck Kobe earlier cal and social systems. These were “temporary this year, projections of losses have been estimated. measures” taken in the first days or weeks after the For example, Parr (1991) estimates that if a Modi- disaster event in order to make the community fied Mercalli Intensity X earthquake occurs in the functional as quickly as possible. The next phase, Wellington region, the minimal governmental replacement reconstruction, emphasised “restoring liability (deriving from claims under the Earthquake capital stocks to pre-disaster levels” and generally and War Damage Act) would be close to NZ$10 returning the appearance of the community to billion. However, this figure may be understating the normal. This second phase could last from several actual losses, since Falck (1989), using data from the months to a few years following the disaster event. 1987 Bay of Plenty earthquake, reports that 10 The last phase was referred to as commemorative, percent of the households had no earthquake cover- betterment and developmental reconstruction and the age and another 10 percent were under-insured. emphasis was on promoting future economic growth and development within the community. This phase An emphasis on physical reconstruction — which we now often refer to as “mitigation” and With an ominous earthquake scenario projecting which has been associated with sustainable develop- catastrophic damage and disruption for the Welling- ment — was expected to last until the onset of the ton region, it would not be unrealistic to hear the next disaster. term “recovery” used almost interchangeably with “reconstruction,” “restoration,” “rehabilitation” and This research was extremely useful in focusing the “redevelopment.” The emphasis is on putting the attention of those in the disaster research area on the community back together again — on reconstructing different types of activities that take place during the the built environment so that people can again be recovery process and on the importance of damage

81 Wellington After the Quake to building stocks and the infrastructure for the A second group of researchers that have focused on recovery process. The authors also incorporated a set reconstruction, using the model developed by Kates of recommendations to planners and community and his colleagues, have taken the view that disasters decisionmakers about how to facilitate these proc- can be seen as opportunities to address long-term esses — that is, how to make the reconstruction material problems in housing and infrastructural following disaster more efficient. systems, recasting reconstruction into a developmental process of reducing vulnerability and enhancing During the past 15 years, several researchers have future economic capabilities (Cuny, 1983; Anderson used this approach, emphasising the physical or and Woodrow, 1991; Kreimer, 1979). Although this material aspects of collective life to investigate how approach has most frequently been applied to disaster-stricken communities become rebuilt developing countries, where disaster losses are (Geipel, 1982; Oliver-Smith, 1993; Oliver-Smith extremely high, including capital investments in new and Goldman, 1988). They have conceptualised major economic and governmental projects, recent reconstruction in terms of replacement of what was disasters in the United States — such as Hurricane lost or restoration of the original system. This Andrew in southern Florida — have demonstrated approach has also been useful in cross-cultural the desire among some social groups to use such an comparisons of recovery from material losses event as an opportunity to replan and redevelop a sustained due to disaster events (Kreimer, 1978; poor, economically ailing community. Bates, 1982; Bates and Peacock, 1993). Recovery as a social process Researchers using this perspective have discovered that communities strive to re-establish themselves in But if one takes this perspective that community forms similar to pre-disaster patterns (Aysan and recovery can be equated with outcomes in the built Oliver, 1987) and that this desire for continuity and environment solely, the sociological significance of familiarity in post-disaster reconstruction may what really transpires in the post-disaster community actually enhance psychological recovery (Marris, is missed. Recovery is not merely an outcome, but 1986; Oliver-Smith, 1992). For example, in their rather it is a social process that begins prior to explanation of the difficulties families confront in disaster impact and encompasses decisionmaking their attempts to recover, Trainer and Bolin (1976) concerning restoration and reconstruction activities. identified three types of general constraints on It must also be recognised that what takes place families’ ability to recover. The first, and most during the aftermath of a disaster had its roots in the obvious, is the physical constraint brought about by pre-disaster phases of response and recovery plan- the destruction of community facilities and other ning as well as mitigation implementation. commercial amenities that were available in the pre- disaster community. With the loss of these physical, Dynes and Quarantelli (1989), for example, have structural resources, there are many functions that argued that: the family can no longer fulfil in normal ways. ... how recovery proceeds is rooted in the Because of the loss of these physical resources, the social structure and fabric of the impacted family faces a temporal constraint. The time it takes society. Put another way, reconstruction is family members to carry out their routine day-to-day less a technical issue than it is a social activities (such as finding food and cooking fuel, matter. Reconstruction only partly involves preparing meals, bathing, etc.) requires much more bricks and land use codes, it mostly concerns time and effort. Because routine aspects of family social values and group interests. life are consuming more energy, time is taken away from other activities (work, leisure, socialising), From this perspective, what becomes important is including rebuilding community structures. Because how those decisions are made, who is involved in of these first two deviations from normal life, family the decisionmaking, what consequences those members experience a third constraint — a subjec- decisions have on the social groups within the tive constraint. As the taken-for-granted nature of disaster-stricken communities, and who benefits one’s physical environment is shattered and as one’s from these decisions and who does not. daily routines become radically altered, any comfort derived from integration into the social life of a Implicit in the sociological notion of “community community disappears. recovery” is the assumption that social groups will experience the recovery process differentially.

82 Joanne Nigg

Communities are not monolithic entities, consisting What accounts for differential rates of family of only one type of residential group. Although we recovery? In most cases, this research has also do sometimes characterise cities by their major focused on natural disaster agents rather than on demographic and social trends, this tends to give the technological (or human-created) agents. false impression that other social groups do not exist or, at least, are not significant. But all communities During times of disaster, the extent to which families are made up of a variety of social groups — the are disrupted — their dwellings damaged or de- elderly and the very young, the very wealthy and stroyed, their members injured or killed, their those on welfare, ideological conservatives and inability to carry on the necessary daily tasks of radicals, different racial and ethnic groups — to providing shelter and sustenance for members — is name only a few. an indication of the extent to which the general community will also suffer disruption. Because these social groups differentially experience the recovery process, the overall discussion of the Bolin and Trainer (1978) offer the earliest pro- community recovery process must include a consid- cessual definition of what family recovery entails. eration of pre-disaster intergroup dynamics and Family recovery is the outcome of a sequence of relationships, and their relative political influence. activities in which families utilise resources to These groups will vary markedly in their ability to overcome disaster-induced losses. This conceptual- influence the decisionmaking process in their isation of recovery as process emphasises the action- communities, depending on: orientation of the family as it tries to cope with the losses it sustained by actively using resources •their relative size in the community; available to it to return to some desired or acceptable •their political linkages to those in decision- pre-disaster condition. Families not only use their making positions; own resources but may also seek assistance from their extended kin group as well as from extra- •the informal as well as organisational contexts familial sources (such as governmental programmes within which contacts take place; and and non-profit organisations). •the cultural history of intergroup relations that has preceded the current encounter. Generalisations on family recovery It must be remembered that these relationships do Several models of family recovery have been not change substantially in post-disaster contexts (cf, developed and tested by the research community Nigg and Tierney, 1993). Although there may be using data from households interviewed at various brief periods of time following the actual impact of intervals following the disaster to determine how the disaster agent on the community during which well they recovered or how they attempted to do so social group barriers are lowered and an altruistic, (cf Bolin 1976, 1982; Bolton, 1979; Drabek and therapeutic community arises (Fritz, 1961; Barton, Key, 1984). Not only have the components of these 1969), providing a context in which supportive and models differed, but the passage of time between the altruistic norms can emerge and enabling a collec- event and when the data were collected varies from tive response to victims of the immediate disaster six months to ten years. event, these periods are usually very short-lived. As has been frequently evidenced, community conflict Despite these differences, generalisations can be soon replaces altruism as communities move from drawn about how and what types of families are the immediate impact period into the relief and long- likely to recover. While the number of studies is term recovery phases of a disaster. relatively small, four topics have relatively consistent findings. In each of the following sections, these generalisations will be investigated for their applica- Family recovery tion to the Wellington region. In all societies, the family is the basic unit of social organisation. To date, the majority of the research Importance of the extended family. From Quaran- conducted on disaster recovery has focused on the telli’s (1960) early comment on the protective family, asking the following types of questions: functions of the family during crisis periods, re- What types of families are most disrupted? What searchers in the disaster area have generally found types of families are likely to recover most quickly? evidence debunking the notion that the nuclear

83 Wellington After the Quake family is isolated from its extended kin group, became homeless within seconds. While some larger whose importance has been increasingly diminished. apartment buildings were affected, single-family Linkages to kin groups are strengthened immedi- dwellings were the most vulnerable type of housing ately following the disaster event and continue into units and resulted in the largest number of dislocated the recovery period as the victim family’s extended families. If 20 percent of the population in the kin group provides assistance to the victim family Wellington region became homeless, are there plans (Drabek and Key, 1976, 1984; Bolin, 1982). One of for sheltering (including the provision of food, water Bolin and Trainer’s (1978) three models of the ways and medical care for a few weeks) or rehousing families recover is the “kinship” model, whereby approximately 80,000 people? In Kobe, one of the victim families rely primarily on resources from most difficult problems the government is confront- their extended kin group. The importance of these ing with respect to the homeless victims is where to enduring relationships has consequences for both locate temporary housing units, given the scarcity of emergency and temporary housing, and for the types vacant land in the Kobe area. No recovery planning of needs that special population groups (e.g. the had taken place in Kobe prior to the quake to elderly, the disabled and families with young anticipate possible housing losses or to consider children) who may become homeless will have. what types of programmes might be needed to rehouse homeless victims. Unlike many other Data from the 1991 Wellington census indicate that disaster events, the Hanshin earthquake was unusual the Wellington region is rather stable with respect to in that many of the homeless victims went to population: 9 percent of the country’s population shelters, rather than to homes of relatives or friends live in this region and the population change rate is in the same area. This was principally due to the very low. Of the approximately 398,000 people widespread loss of homes, resulting in the inability living in the region, 22 percent are under 15 years of of people to take refuge outside of government- age while 14 percent are over 60. Of the approxi- operated shelters. In other words, extended families mately 142,000 households in the Wellington could offer some assistance, but it meant that victims region, 75 percent are living in single-family had to leave the immediate area, disrupting neigh- dwellings and 71 percent either own or are buying bourhood patterns and friendship networks. Similar their homes. Currently, 7 percent of the households situations have been observed, to a much lesser in the area already consist of extended families and extent, in Northridge (the so-called “ghost town” another 7 percent contain unmarried people who are phenomenon), which resulted in some heavily residing together. Fifty percent of those who are 15 damaged neighbourhoods being completely aban- years of age or older are married, only 15 percent are doned. separated, divorced or widowed. The remainder of the adult population (35 percent) have never been Following the Northridge earthquake, 22,000 people married, a third of whom may still be living at home were made homeless in the city of Los Angeles with parents due to their ages (between 15 and 19). alone, and moderate to severe structural damage Following a world-wide trend, 21 percent of the affected 21,000 residential units. Unlike Kobe, households in the Wellington region are single- however, only 2000 of the damaged residential person households, characterising the region by a structures were single-family homes (ad hoc Com- relatively low density rate of only 2.8 persons per mittee on Earthquake Recovery, 1995), and apart- household. ment complexes were found to be most vulnerable. However, also unlike Kobe, the vacancy rate in Los From this profile of residents of the Wellington Angeles — even after the earthquake — was region, what types of housing problems might we sufficiently high (in the most damaged areas) to expect to result from the scenario earthquake and allow people to be rehoused quickly through the how would those problems affect recovery? The first provision of a variety of local, state and federal problem concerns the need to project the number of housing grant programmes. By leaving people close households that would become dislocated and in to their original neighbourhoods, employees were need of both emergency shelter as well as temporary still able to get to work in usual ways and children housing following a high-intensity earthquake. From did not have to be relocated from their schools, the Northridge and Hanshin (Kobe) earthquakes, it providing a minimum of broader social disruption. was learned that housing losses can have devastating effects on the recovery effort. In Kobe, approxi- Without knowing more about the condition of the mately 21 percent of the population of the city housing stock in the Wellington area, we can predict

84 Joanne Nigg little regarding the magnitude of potentially home- the city. What is the likelihood that a proportion of less victims. Questions that need to be answered these properties could become damaged in the include: What seismic design requirements have scenario earthquake and what types of alternative been required for single-family dwellings — since housing might be available? If a sufficient propor- those are the most frequent type of structure used by tion of the elderly live alone, what types of special almost three-quarters of the population — in the emergency response efforts (like search and rescue) Wellington region? For example: as well as long-term services may be necessary to protect the health and welfare of these more fragile • What proportion of single-family dwellings members of society, many of whom probably live on might not be anchored to foundations? small fixed incomes and have medical needs that • What proportion might not have roofs and walls require professional monitoring? In the Northridge tied together? earthquake, several group-living facilities (including • What proportion might have cripple wall founda- mobile-home parks and long-term nursing homes) tions? for the elderly — those who required round the clock nursing as well as those who were relatively • What proportion may have masonry chimneys independent — were damaged severely, requiring tied to roof or wall systems without adequate the identification of group-like facilities in hotels independent support? farther from the impact areas. This was an unexpected problem that required extensive efforts to be In terms of recovery planning, attention must also be undertaken in both the immediate and longer-term directed to areas where the building stock is under- time frames, often resulting in a great deal of going deterioration, gentrification, redevelopment or disruption for the residents of these facilities because changes in use. For example, in a report to the they often had to be moved more than once. Wellington City Council on inner city housing needs (Housing and Community Development, 1993), an The effects of low socioeconomic status. Poorer unmet need was identified for housing in the inner families are not only more vulnerable to disaster- city, especially for students, young professionals and induced losses (Miller and Nigg, 1993), but also older people without children. The report identified have more difficulty recovering (Kilijanek and a high vacancy rate in the central business district of Drabek, 1979; Bolin, 1982; Bolin and Bolton, 1986). Wellington, principally in commercial buildings that Due to their lack of economic resources during were 30 to 45 years old and could be converted to normal times, poorer families are often housed in residential units by developers. However, the report substandard structures in hazard-prone areas, cautioned that the conversion of these structures making them more vulnerable to natural disaster should be monitored since: agents. Despite the fact that poor families often have developers may not give adequate attention the greatest needs following a disaster, they have the to the strengthening [for seismic resistance] most trouble acquiring extra-familial aid. of older buildings in this vulnerable area of the city... According to the 1991 Wellington census, 6 percent of the region’s residents 15 years of age and older (p. 6) are unemployed and another 30 percent do not consider themselves in the workforce for various In this instance, earthquake hazard mitigation is reasons — retirement, homemaker, student or directly related to recovery planning; being aware of incapacity. For almost one-third of the region’s adult the changed uses of these structures may directly residents, annual income is less than NZ$10,000. change both response and recovery strategies for the The Quarterly Commentary for Wellington City inner city area. (March 1994) reported that the number of jobs in Among the population groups that may need addi- Wellington declined by about 15 percent between tional consideration are the elderly. One of every six 1989 and 1993, and that the trend may continue. people in the region are over 60 years of age, and Several questions must be answered about these many of them will have health and mobility prob- poorer households before recovery planning can take lems. According to the Quarterly Commentary for place: Wellington City (October-December, 1993), one-half of Wellington’s elderly live in properties rented by

85 Wellington After the Quake

• Where are these households located in the when they do receive external recovery assistance, region? however, they are more likely to evaluate it as inadequate and to recover economically more •Will some communities have more poor families slowly. In most societies, socio-economic status and with relatively few resources that they must race are interrelated in complex and often different prepare to shelter and rehouse? ways. Ethnic and racial minority groups are dispro- •Are these poorer households located in more portionately poorer than the dominant racial/ethnic vulnerable structures, making them more likely group in a society. Because they are poorer, they are to become homeless victims requiring a large also disproportionately more vulnerable, both to the variety of services? disaster agent and to the negative impacts of long- •Are these households more likely to contain term recovery. elderly on small, fixed incomes who may not be All recovery planning must take into account the able to qualify for conventional loans to repair “natural” spatial and social ethnic or racial commu- damaged homes? nities that make up the metropolitan region. These • How many of these poorer households contain groups will have historical relationships with local members who are physically handicapped who and national governmental systems that may either may require expensive medical assistance to live facilitate or hinder their post-disaster access to outside of their homes? disaster services. To the extent possible, community- • What types of unemployment benefits are based groups in each of these communities should available to the poor, who may be functioning on be included in the pre-disaster response and recovery the margins of solvency under normal conditions planning in order to assure that their cultural norms and who become unemployed due to earthquake and values can be accommodated within the recov- damage or disruption of their employers’ facili- ery plans. For example, it may be more practical to ties? have the community-based organisation plan to set up shelters and feeding operations within their own It must be remembered that the social relationships neighbourhoods than to expect groups that typically and conditions that exist prior to any disaster will be have not had good social relations in the past to co- carried forward into the relief and recovery periods. locate in the same facilities. Also, by bringing into Those individuals without financial resources will the planning process members of these different find it even more difficult to meet daily needs. communities before a disaster occurs, members of Those with compound problems — the poor elderly, those groups are more likely to become familiar with poor single-parent families, poor families with the governmental structures that will lead the disabled members — will not only find it difficult to response and recovery process. So-called “system find temporary assistance, but the organisational and awareness” may, therefore, be higher, resulting in social relationships that made it possible to function better outreach efforts within those communities in normal times may be absent for an extended following the disaster and a more equitable distribu- period of time following the earthquake, necessitat- tion of relief and recovery resources. ing planning not only to provide immediate services but to replace the social supports that made it Urban-rural differences. A comment should also be feasible for them to remain independent with made concerning urban-rural differences on family augmented assistance programmes. recovery. As crucial as this variable has been in explaining different patterns of family life, it has not The effects of race or ethnicity. While there are some received much systematic attention from disaster cultural differences, racial and ethnic minority researchers. One reason for this omission is probably families generally have the greatest difficulty due to the single case-study method used in studying recovering from disasters (Moore, 1958). They are disaster events. However, Bolin (1982) was able to least likely to have insurance to cover their losses make some observations about the influences of (Bolin and Bolton, 1986), their extended kin groups residential location — that is, family residence in an have fewer resources to provide and they rely much urban or rural environment — in his comparative more extensively on governmental aid for relief and study of disaster events. Rural victims were found to recovery. However, they also have the greatest use their kin group as a source of emergency shelter difficulty obtaining external aid (Dash, 1995). Even more often than did urban victim families. In rural areas, high-income victim families had fewer losses

86 Joanne Nigg than lower-income families. Rural families were also are physically housed in structures that are more or less likely to receive extra-familial assistance (that less vulnerable, they may be embedded in a network is, less aid and from fewer sources) than did urban of community organisations, and the types and victim families. amount of resources they have access to varies. On the basis of these characteristics, some businesses In recent work on disaster recovery completed by are obviously going to be less vulnerable to a the Disaster Research Center (DRC), significant disaster agent and more capable of recovering from differences were found in the relationship between disaster impacts. This raises questions about the social context (that is, whether the community is adequacy of programmes available to businesses to basically in a rural or an urban area) and the recov- assist them to recover and whether those pro- ery process (Miller and Simile, 1992; Simile, 1995). grammes have similar problems of availability for Due to the physical and social invisibility of the certain classes of businesses (as was found for rural poor, they are often overlooked in terms of certain classes of families). Dahlhamer (1992) did efforts to assess their needs and to provide resources find evidence that some types of businesses have for their recovery. greater success in obtaining governmental loans. In general, he found that businesses with older owners Business recovery located in a building also owned by the business owner and whose owner had good credit could get a As significant as the economic sector obviously is in federal loan from the Small Business Administration the recovery process for any community, it has following a disaster. He also found that some received almost no attention from social scientists business owners got more favourable loan terms involved in disaster research. In his extensive review than others. Dahlhamer concluded that the federal of disaster research findings, Drabek (1986) does not disaster loan program was systematically not even mention the economic sector. After an exhaus- assisting those businesses that need the greatest tive review of the literature on business recovery amount of assistance to recover, but was aiding following a disaster, Dahlhamer (1992) found only those businesses that could have obtained loans from three studies (Durkin, 1984; French et al., 1984; commercial sources. Nigg and Tierney, 1990) that addressed this issue. Secondly, businesses play vital roles in communities However, sprinkled throughout the disaster literature by providing goods and services to specific client are indications of the disruption of community life groups, as well as providing employment opportuni- due to the disruption of the business community. For ties for community residents. If businesses must example, one of the first events that documented the close due to structural damage, inventory losses, impacts of disaster on business communities was the losses of employees or losses of markets, what Xenia tornado of 3 April 1974. The entire downtown consequences are there for both family recovery and area, housing the city business district, was devas- community recovery? Obviously, the longer busi- tated. Approximately 155 commercial and four nesses are closed, the greater the economic strain on industrial businesses in 121 structures were de- families whose members were employed by those stroyed, including eight supermarkets. One hundred enterprises. Also, when businesses that provide basic other businesses suffered major or minor damage goods and services (e.g. markets, clothing stores, gas (DRC, 1976). More recently, the downtown business stations, banks, utility companies) to community district of Santa Cruz, California, was devastated by residents are not operational, the greater the tempo- the 17 October 1989 Loma Prieta earthquake. It was ral constraint — the length of time it takes house- estimated that 60 percent (approximately 650) of the hold members to complete routine daily tasks — on downtown businesses were destroyed or sufficiently family recovery (Trainer and Bolin, 1976). damaged to require at least temporary closure (DRC, 1993). Beyond these obvious implications for business recovery, community recovery can be affected in There are two compelling reasons why communities two important ways. Firstly, the longer commercial should actively address the business recovery enterprises are non-operational, the greater will be process. First, businesses as units of analysis have the impact on revenues for the local government. many of the same characteristics as households: they Local governments receive a great deal of their vary in size, they have incomes, they age, they have operational income by collecting fees and taxes on socioeconomic locations in the social structure, they commercial transactions or from property taxes.

87 Wellington After the Quake

Following a disaster, a community’s revenues from systems throughout the region were likely to sustain these sources may drop dramatically until property major disruption from groundshaking, liquefaction, owners can repair commercial buildings and busi- landslides and land subsidence. nesses can recover sufficiently to put employees back to work, providing goods and services. While A question that has been recently addressed by the there is some compensation for the decline in these Disaster Research Center is the extent to which revenues to local government from the infusion of lifeline disruption affects business continuity; that is, external aid, this intervention is short-lived. If the how does the loss of specific lifelines effect the business sector does not sufficiently recover, ability of a business to function if its physical community-based services (public works mainte- facilities, equipment and inventory have not sus- nance, social and health services, schools, cultural tained sufficient damage to cause the building to and recreational programs, and planned economic close (Nigg and Tierney, 1994). This is an extremely development initiatives) will be cut back, delayed, or important question, as the recent Hanshin earthquake eliminated. illustrated, since the effects of lifeline failures go far beyond the immediate impact area and can affect the Secondly, some businesses serve the needs of economic health of an entire metropolitan area, even particular neighbourhoods and rely on local resi- to those businesses that could otherwise remain open dents to use their establishments. When such and contribute to the region’s general recovery, as businesses cannot recover from a disaster, what was the case following the Northridge earthquake consequences does this have for the neighbourhood last year. In a study of businesses in Memphis, or the community that business serves? Some Tennessee — a metropolitan area that would be research has suggested that the character of the affected by an earthquake on the New Madrid fault community may actually be changed if people have system — a random sample of businesses was used to leave their neighbourhoods to market, shop, bank to determine the importance of various lifelines to and use recreational facilities, or if their children businesses in different economic sectors and the have to go to schools at a greater distance from their amount of time the business could remain open if homes. Bondedness to the neighbourhood may that lifeline failed. decline and the businesses that remain may actually be hurt by the general decline in foot-traffic or Table 1 presents the general importance of different normal transportation patterns that had supported systems for all of the businesses included in the them in pre-disaster times. In Los Angeles, follow- study. Two clusters of services emerged: electricity ing the Northridge earthquake, at least a dozen and phone services were very important to business “ghost towns” have been identified, where the function, while the criticality of water, wastewater, owners of both damaged businesses and residential and natural gas systems was modestly important. properties have been unable to recover from the When asked how long the business could remain earthquake and, in effect, walked away from the open without access to particular lifeline services, destroyed properties, leaving abandoned, blighted we see a similar pattern. Without electricity, the vast neighbourhoods. majority of firms would cease operating immediately and most could operate only half day at most In considering the ways that community businesses without telecommunications (Table 2). Business can be harmed, communities must not just concen- could continue for approximately two days without trate on the primary causes of losses; that is, on the either water or wastewater and natural gas customers effects of ground shaking on buildings and their could continue for almost a week without that inventories. While this is the most dramatic form of service. loss, it must be remembered that businesses can also sustain secondary losses from interruptions to Further analysis of this data, however, indicated that lifeline systems (e.g. electrical systems, water and the size of the business (i.e. the number of workers sewerage systems, telecommunications systems, employed) and economic sector did matter for some transportation systems and natural gas systems). A lifelines. Table 3 presents the median numbers of project undertaken by the Centre for Advanced hours that businesses, by size and sector, could Engineering at the University of Canterbury (1991) continue to operate without water. It was found that reviewed the likely performance of the Wellington 25 percent of all businesses would have to shut region’s major lifeline systems to two different types down immediately if their water system failed, but of earthquake events. It was concluded that lifeline 12 percent reported that they could function indefi-

88 Joanne Nigg

Table 1: Importance of lifeline service to business operations under normal conditions

Importance Lifeline Services Electricity Water Natural Gas Wastewater Telephone (%) (%) (%) Treatment (%) (%) Very Important 82 27 18 23 78 Important 14 34 29 32 17 Not very 33139333 important Not important 181313 2 at all TOTAL 100 100 991 1011 100 1Does not total 100% due to rounding. nitely without water. Although Table 3 indicates that identification of back-up systems (e.g. electrical there are some differences across sectors, these generators and cellular phones); the prioritisation of differences were insignificant. However, small mitigation measures and restoration plans for lifeline businesses, regardless of economic sector, were providers, which would include the lesser damaged found to be significantly less dependent on water areas of the region if they contain sufficient eco- availability than were larger businesses. Considering nomic enterprises. If one knows what businesses are other lifeline systems’ disruption, it was found that: dependent upon which lifeline systems, it allows emergency managers, in conjunction with lifeline • For electrical systems, 59 percent of the area’s service providers and the business communities, to businesses would have to shut down immedi- engage in informed, strategic planning before and ately, and this seemed to affect both large and following a disaster for ways to reduce economic small businesses, and businesses in all economic disruption. sectors equally.

• For telecommunications systems, 45 percent of Conclusion all businesses, regardless of size, would close immediately, but wholesale and retail businesses When we talk about community recovery from could stay open significantly longer than other disaster, our orienting concept is one of a system types of businesses. that is responding to stress. System stress takes place when demands on the social system exceed the • For wastewater (or sewerage) systems, 20 system’s ability to respond to demands being placed percent of businesses, regardless of size, would on it (Haas and Drabek, 1970; Mileti et al., 1975). close immediately, and those businesses in the The greater the impact of a disaster agent on a service sector would have to close significantly community’s built and social environments, the sooner than other businesses. greater the amount of stress on the system. How • For those companies that use natural gas, 18 communities respond to long-term stress in the post- percent would close immediately, regardless of impact years will have consequences for families, size or economic sector. businesses and the local government.

While these statistics reflect assumptions that business owners have about their dependence on Table 2: Median number of hours businesses lifeline systems for their ability to remain open, could operate with lifeline loss these are some of the best indicators we have available upon which to make assessments about the Utility Median Number secondary impacts of an earthquake on business of Hours operations. Getting an indication of the effects of Electricity 0 lifeline interruption on the economic viability of an Water 48 entire region following an earthquake allows for Natural Gas 120 various types of planning to take place — prepared- Wastewater Treatment 48 ness planning for businesses with respect to the Telephones 4

89 Wellington After the Quake

Table 3: Median number of hours businesses could Anderson, Mary and Peter Woodrow. 1991. operate with loss of water by type and size of business Rising from the Ashes: Development Strategies in Times of Disaster. Boulder, Colorado: Type and Size of Business Median Number Westview Press. of Hours Wholesale and Retail Trade Aysan, Yasemin and Paul Oliver. 1987. Smalla (N=124) 120.0 Housing and Culture after Earthquakes. Largeb (N=36) 24.0 Oxford: Oxford Polytechnic Press. Manufacturing and Construction Small (N=64) 72.0 Barton, Allen H. 1969. Communities in Disas- Large (N=26) 48.0 ter: A Sociological Analysis of Collective Stress Situations. New York: Doubleday. Business and Professional Services Small (N=129) 24.0 Bates, Frederick L. 1982. Recovery, Change Large (N=52) 23.5 and Development: A Longitudinal Study of the Finance, Insurance, and Real Estate 1976 Guatemalan Earthquake. Small (N=71) 120.0 Large (N=23) 8.0 Bates, Fred L and Walter Gillis Peacock. 1993. Otherc Living Conditions, Disasters and Development: Small (N=61) 168.0 An Approach to Cross-Cultural Comparisons. Large (N=29) 72.0 Athens, Georgia: University of Georgia Press. All Businesses (N=627) 48.0 Bolin, Robert C. 1982. Long-Term Family a Small businesses are those with 19 or less employees. Recovery From Disaster. Institute of Be- b Large businesses are those with 20 or more employees. havioral Science, University of Colorado, c “Other” consists of agricultural, fishing, forestry, mining, transportation, and public communications firms. Boulder, Colorado.

Bolin, Robert C. 1976. “Family recovery from Our knowledge of recovery “lessons” is still in its natural disasters: A preliminary model.” Mass infancy. This relatively new area of disaster research Emergencies 1: 267-277. is still only minimally informed by theoretical approaches, has yet to develop consistent conceptual Bolin, Robert and Patricia Bolton. 1986. Race, and operational definitions of key concepts, and is Religion, and Ethnicity in Disaster Recovery. still in search of generalisable findings. One thing Institute of Behavioral Science, University of that is certain, however, is that we are beginning to Colorado, Boulder, Colorado. know what potential problems must be considered and resolved before the disaster strikes a community Bolin, Robert C and Patricia Trainer. 1978. “Modes or region in order to reduce human suffering, of family recovery following disaster: A cross- minimise economic loss and disruption in the private national study.” pp. 233-247 in Disaster: Theory and sector and maintain effective governmental action. Research. Ed. E L Quarantelli. Beverly Hills, We must remember that recovery is a very long California: Sage. process, having its roots in the pre-impact period when preparedness and mitigation are taking place Bolton, Patricia. 1979. Family recovery following a — and where potential problems, risks and vulner- natural disaster: The case of Managua, Nicaragua. abilities can be identified — to a decade or two after Doctoral dissertation. Department of Sociology, a disaster has taken place, when the region and its University of Colorado. people will be experiencing different kinds and rates of recovery. Centre for Advanced Engineering. 1991. Lifelines in Earthquakes: Wellington Case Study. Christchurch: University of Canterbury. References Ad hoc Committee on Earthquake Recovery. 1995. Cuny, Frederick C. 1983. Disasters and Develop- In the Wake of the Quake: A Prepared City Re- ment. New York: Oxford University Press. sponds. Report to the Los Angeles City Council, Los Angeles, California.

90 Joanne Nigg

Dahlhamer, James M. 1992. Small business and the Earthquake of May, 1983. Institute for Behavioral Whittier Narrows earthquake: Loan request out- Science, University of Colorado, Boulder, Colorado. comes in the US Small Business Administration disaster loan program for businesses. Master’s Friesma, H Paul, James Caporaso, Gerald Goldstein, thesis. Department of Sociology, University of Robert Lineberry and Richard McCleary. 1979. Delaware. Aftermath: Communities After Natural Disasters. Beverly Hills, California: Sage. Dash, Nicole. 1995. Inequality in disaster: The case of Florida City. Master’s thesis. Department of Fritz, Charles A. 1961. “Disaster.” In Contemporary Sociology and Anthropology, Florida International Social Problems. Eds. Robert K Merton and Robert University, Miami. A Nisbet. New York: Harcourt, Brace & World.

Disaster Research Center. 1976. Internal memo on Gilbert, J E. 1958. “Human behavior under condi- the Xenia survey data. Disaster Research Center, tions of disaster.” Annals of the American Academy Ohio State University, Columbus, Ohio. of Political and Social Science 309: 42-51.

Disaster Research Center. 1993. A Comparative Geipel, Robert. 1982. Disaster and Reconstruction: Analysis of Community Disaster Recovery. Disaster The Friuli (Italy) Earthquakes of 1976. London: Research Center, University of Delaware (forthcom- George Allen and Unwin. ing). Golec, Judith A. 1983. “A conceptual approach to Drabek, Thomas E. 1986. Human System Responses the social psychological study of disaster recovery.” to Disaster: An Inventory of Sociological Findings. International Journal of Mass Emergencies and New York: Springer-Verlag. Disasters 1 (2): 255-276.

Drabek, Thomas and William Key. 1984. Conquer- Haas, J Eugene and Thomas E Drabek. 1970. ing Disaster: Family Recovery and Long-Term “Community disaster and system stress: A sociologi- Disaster. New York: Irvington Publishers. cal perspective.” pp. 264-286 in Social and Psycho- logical Factors in Stress. Ed. Joseph E McGrath. Drabek, Thomas and William Key. 1976. “The New York: Holt, Rinehart, and Winston. impact of disaster on primary group linkages.” Mass Emergencies 1 (2): 89-105. Haas, J Eugene, Robert W Kates and Martyn J Bowden. 1977. Reconstruction Following Disaster. Durkin, Michael E. 1984. “The economic recovery Cambridge, Massachussets: MIT Press. of small businesses after earthquakes: The Coalinga experience.” Paper presented at the International Housing and Community Development, General Conference on Natural Hazards Mitigation Research Managers Office, Wellington City Council. 1993. and Practice, New Delhi, India. Report to Mayor Fran Wilde and Members of the Housing and Community Development Committee Dynes, R R and E L and Quarantelli. 1989. “Recon- on Inner City Housing, July 6. struction in the context of recovery: Thought on the Alaskan earthquake.” Preliminary paper #141, Kilijanek, T S and T E Drabek. 1979. “Assessing Disaster Research Center, University of Delaware. long-term impacts of a natural disaster: A focus on the elderly.” The Gerontologist 19(6): 555-566. Falck, L B. 1989. Disaster Insurance — Reform in New Zealand. Kreimer, Alcira. 1978. “Post-disaster reconstruction planning: The cases of Nicaragua and Guatemala.” Flynn, Cynthia and James Chalmers. 1980. The Mass Emergencies 3: 23-40. Social and Economic Effects of the Accident at Three Mile Island. Mountain West Research, with Kreimer, Alcira. 1979. “Emergency, temporary and Social Impact Research, Tempe, Arizona. permanent housing after disasters in developing countries.” Ekistics 46: 361-365. French, S P, C A Ewing and M S Isaacson. 1984. Restoration and Recovery Following the Coalinga

91 Wellington After the Quake

Lifton, Robert Jay and Eric Olson. 1976. “The Oliver-Smith, Anthony. 1993. “Post-disaster recon- human meaning of total disaster: The Buffalo Creek struction: An overview of issues and problems.” experience.” Psychiatry 39: 1-18. Paper presented at the Seminar on Socio-Economic Aspects of Disasters in Central America in San Jose, Mardle, R J. 1967. The growth of a multi-racial Costa Rica, January, 1993. society in New Zealand. pp. 15-40 in Administration in New Zealand’s Multi-racial Society. Eds. R H Oliver-Smith, Anthony. 1992. The Martyred City: Brookes and I H Kawharu. London: Oxford Univer- Death and Rebirth in the Andes. Homewood, sity Press. Illinois: Waveland Press.

Marris, Peter. 1986. Loss and Change. London: Oliver-Smith, Anthony and Roberta Goldman. 1988. Routledge and Kegan Paul. “Planning goals and urban realities: Post-disaster reconstruction in a Third World city.” City and Mileti, Dennis S, Thomas E Drabek and J Eugene Society 2 (2): 105-126. Haas. 1975. Human Systems in Extreme Environ- ments. Institute of Behavioral Science, University of Parr, Arnold R. 1991. “Insurance and Natural Colorado, Boulder, Colorado. Disasters: An Examination of the New Zealand Earthquake and War Damage Commission.” Paper Miller, Kristin and Joanne M Nigg. 1993. “Event presented at the UCLA International Conference on and consequence vulnerability: Effects on the the Impact of Natural Disasters, Los Angeles, disaster recovery process.” Paper presented at the California. annual meeting of the Eastern Sociological Society, Boston, Massachusetts. Quarantelli, E L. 1960. “A note of the protective functions of the family in disaster.” Marriage and Miller, Kristin S and Catherine M Simile. 1992. Family Living 22 (3): 263-264. They could see stars from their beds: The plight of the rural poor in the aftermath of Hurricane Hugo. Rossi, Peter H, James D Wright, Eleanor Weber- Preliminary paper 175. Disaster Research Center, Burdin and Joseph Pereira. 1983. Victims of the University of Delaware. Environment. New York: Plenum Press.

Moore, Harry Estill. 1958. Tornadoes Over Texas. Rubin, Claire B, Martin D Saperstein and Daniel G Austin: University of Texas Press. Barbee. 1985. Community Recovery from a Major Natural Disaster. Institute of Behavioral Science, Nigg, Joanne M and Alvin H Mushkatel. 1985. “The University of Colorado, Boulder, Colorado. effects of fear on behavior following a natural disaster.” Paper presented at the Annual Meeting of Simile, Catherine M. 1995. Disasters as contexts for the American Public Health Association, Washing- claims-making. Doctoral dissertation. Department of ton, D.C. Sociology and Criminal Justice, University of Delaware. Nigg, Joanne M and Kathleen J Tierney. 1994. “Projections of business disruption due to earth- Trainer, Patricia and Robert Bolin. 1976. “Persistent quake effects in Memphis, Tennessee.” Paper effects of disasters on daily activities: A cross- presented at the Natural Hazards Research Sympo- cultural comparison.” Mass Emergencies 1: 279- sium, Louisville, Kentucky. May 31-June 2, 1994. 290.

Nigg, Joanne M and Kathleen J Tierney. 1993. Disasters and Social Change: Consequences for Community Construct and Affect. Disaster Research Center, University of Delaware.

Nigg, Joanne M and Kathleen J Tierney. 1990. Explaining Differential Outcomes in the Small Business Disaster Loan Application Process. Disaster Research Center, University of Delaware.

92 Discussion Economic and social framework

hris Henri (Insurance Council of Australia) hoped that her work would interest landlords in remarked that there had been no mention of maintaining emergency generators, etc. Landlords C the language problem. Following the should be more involved because of their need to Newcastle earthquake, there were 67 languages to retain tenancies. Previously, there had been little address and getting the message through was attention to the importance of lifeline services for incredibly difficult. He related the example of a recovery as well as response. Local engineering Chinese couple who would not move because their managers of utilities should get together to plan son had told them not to let anyone put them out of mitigation measures and disaster response. their home. Joanne Nigg said that after the North- ridge earthquake, the authorities had made provision George Walker (Alexander Howden Reinsurance) for speakers of Chinese, Korean, Cambodian, South commented that, in Hal Cochrane’s figures for American languages and others, but still had a Kobe, a very low percentage of property and problem with outreach (e.g. to the Armenian com- business interruption was insured. This is very munity, and with the numerous Chinese dialects). different from New Zealand, where much of this risk is reinsured overseas. This changes the economics David Brunsdon (Wellington Lifelines Group) compared with the earthquakes in Kobe and Mexico. remarked that Joanne Nigg’s survey showed what Hal Cochrane said it would not take much of an his group suspected, that transportation was a key earthquake to bankrupt many insurance companies lifeline. Joanne Nigg said that the survey in Mem- in the USA, and he did not know how much could phis did not ask about transportation because the last be passed on to reinsurers. A situation where major events there were early last century and they insurance was enough to cover all losses would be did not want to get too hypothetical, but studies an extraordinary case. He did not know how much involving transportation are going on in Des Moines of a $24 billion loss in Wellington could be passed (Iowa) and Santa Monica. on to the insurance industry. He assumed that he was dealing with a situation where insurance was quite Martin Hall (AMP Insurance Ltd) asked Hal insufficient to meet the loss. Cochrane how sensitive his results were that interest rates would double and that total loss was so much greater than direct loss. Hal Cochrane replied that total loss had been developed from the ratio of debt to GNP and that rebuilding of Wellington was taken as given.

David Greig (Auckland Regional Council) asked Joanne Nigg whether there was much of an earthquake threat to New York. Joanne Nigg replied that there was enough risk to now include seismic design in building codes in New England, the State of New York, Washington and Oregon.

John Blakeley (Centre for Advanced Engineering) said that he understood that much of the problem in Kobe for businesses re-establishing after the earthquake was in matters over which they had little control, e.g. restoring connections to services. He asked if the survey showed whether businesses in the US had any idea about protecting themselves against this. Joanne Nigg stated that in Des Moines, most businesses did not own their properties, but she

93 Wellington After the Quake

94 Claire B Rubin

Physical Reconstruction 1

95 Wellington After the Quake

96 Claire B Rubin

Physical reconstruction: Timescale for reconstruction

Claire B Rubin

Claire B Rubin & Associates, Arlington, Virginia

Experiences in the US have shown that recovery at the local level has many variations, because localities have different characteristics, needs, and means and because disasters come in many types and intensities. An understanding of the complexities of the recovery process is essential before one can engage in strategic thinking and planning for recovery. Among the essential elements are determining both the progression and timing of the major elements of the process.

While the efficiency of recovery is important, so is the quality. An effective recovery process should incorporate mitigation measures, such as seismic-resistant building codes, that would protect human health and safety in the case of another seismic event.

There are many forms of recovery, ranging from the minimal effort of simply replacing many structures and systems as they were prior to the major disaster to the carefully calculated development of seismically resistant structures that will withstand future earthquakes. A conceptual model of three forms of recovery, with varying degrees of mitigation measures incorporated are shown, in an attempt to illustrate the range of choices involved in the recovery process. There also are some confounding factors in recovery: the many simultaneous demands for assistance and resources, and the heavy demands on the intergovernmental relations process.

Finally, a Community Planning Matrix is provided in order to help local public officials assess local needs and determine priorities and timing for implementing reconstruction and recovery actions needed in all of the major domains of urban life.

Introduction community recovery can be done, should be done, but all too often are not done. In the US, recovery from a major disaster at the local government level has many variations because The US has had some recent experiences with major localities have different characteristics, needs and devastating earthquakes, as well as some major means, and because disasters come in many types hurricanes, that may be helpful to emergency and intensities. Accordingly, there are many ways to managers and planners in New Zealand. New approach the recovery process, from the standpoint Zealand, of course, has its own special risks, needs of the key government, civic and private leaders in a and resources. In fact, you even have some decided disaster-impacted area and also many factors that advantages over the US, such as the existence of may affect the timing and duration of recovery. nationwide, seismic-resistant building codes. Some impacted areas engage in strategic thinking Perhaps some of the US experience will be of use and planning for recovery, while others engage in a and will spare you from having to learn first-hand patchwork of small plans that result in a free-form what does and does not contribute to an efficient and product. I am using the term strategic planning to effective recovery. refer to the process of building a vision and assembling the means to carry it out. I plan to briefly discuss what is needed for an efficient recovery at the local level, and then what is Strategic planning for recovery from a major involved in an effective recovery — i.e. one that earthquake in the Wellington area can provide the takes into consideration future seismic events and basis for setting priorities and for creating a time- includes mitigation measures in the reconstruction scale for the reconstruction and recovery process. process. I also plan to deal with some of the con- Anticipating a major earthquake event, planning to founding factors in recovery, particularly the many mitigate its harmful impacts, and planning for simultaneous demands that can be expected to affect a relatively small number of public officials and a

97 Wellington After the Quake finite amount of resources (public and private) ridge (1994) earthquakes have shown that in the less available for reconstruction and recovery. Another than five years that elapsed between the two events, major confounding factor is the intergovernmental the Federal Emergency Management Agency took relations process for restoring (a) the administrative many steps to improve the efficiency and effective- capacity of each level of government to function, ness of its ability to manage the federal response and and (b) the restoration of government buildings and recovery assistance. other essential structures in the nation’s capital city. For example, it was reported in the newspapers that There is no such thing as an “acceptable timescale” public emergency response in Kobe suffered from a for recovery from a large disaster. Expectations from lack of clearly differentiated powers and authority of citizens, media and business interests both in each level of government. California and Japan have led to tremendous pressures on public sector decisionmakers and to efforts The emergency management experiences in two to reduce the lead time for governmental response recent major earthquakes — one in Kobe, Japan and recovery actions. Without wanting to sound (1995) and the other in Northridge, California facetious, it seems that almost any timescale will be (1994) — can provide some useful insights about the unacceptable to some sector or interest group that difficulties of recovering from a major earthquake in was impacted by the quake. a heavily populated urban area. Both quakes occurred in countries thought to be relatively well The fact that there has not been a major disaster in prepared, but both events revealed many unpleasant New Zealand in 60 years is very serious from this surprises to emergency management personnel, point of view. It highlights the need for large-scale construction experts, and others. simulation exercises and work on-site at overseas disasters. In the aftermath of these two recent events, I am struck by the intense media coverage and intense In order to gain speed, without doing so at the public scrutiny of all aspects of the response and expense of effectiveness or equity in providing recovery processes. In the US, we refer to the assistance and services, a great deal of attention will immediate and intense television coverage of major have be given to streamlining decisionmaking in disasters as the “CNN syndrome” (CNN is the Cable advance of a major earthquake. In fact, many aspects Network News station). My concern here is that as a of intergovernmental decisionmaking can be negoti- result of almost immediate coverage of an unfolding ated in advance of a major disaster. Various forms of disaster event, and the frequent replay of the most memoranda of understanding and mutual aid dramatic destruction, unrealistic expectations occur agreements can and should be put into place in regarding what can be done in the way of response advance of their being needed. Another possible and recovery. The TV coverage dramatises the needs consideration should be for major governmental but does nothing to aid the response capability of the agencies and businesses to consider alternative emergency responders. It can, however, spotlight operating sites to avoid interruption of their key inaction or inadequate action. In short, the CNN functions. syndrome contributes to the general dissatisfaction with the ability of public officials to manage re- The disaster recovery process sponse and recovery quickly enough. From the standpoint of the victims, the timescale for recon- Why do some places recover quickly and effectively struction and general community recovery can never and others do not? What are the characteristics of a be short enough. successful recovery? In the 1980s, I headed a study of 14 communities recovering from a major natural Aside from the general desire to reduce suffering disaster that had received national attention and among victims, there are many other pressures to federal assistance (Rubin et al., 1985). The size and expedite recovery. It is becoming increasingly location of the communities varied widely and the important to manage reconstruction as efficiently type of disaster event varied too. We tried to deter- and effectively as possible. In the past five years in mine what are the characteristics of communities the US, the political pressures on the federal govern- that recovered quickly and effectively from the ment have been enormous and indeed have resulted disaster as compared with those that were slow and in some improvements. Recent reviews and analyses troubled in their recovery efforts. of the Loma Prieta (California, 1989) and North-

98 Claire B Rubin

We determined that there are three essential ele- There are many forms of recovery, ranging from the ments to the recovery process at the local level in the minimal effort of simply replacing many structures US: and systems as they were prior to the major disaster to the carefully calculated development of seismical- 1. personal leadership; ly resistant structures that will withstand future 2. the ability to act (administrative capability); and earthquakes. A conceptual model of three forms of 3. knowledge to act — knowing what do about a recovery, with varying degrees of mitigation meas- specific disaster event. ures incorporated is shown in Figure 3, which is an attempt to illustrate the range of choices involved in A graphic depiction of the many forces and factors the recovery process. The key points here are the that contribute to recovery and determine the relative varying degrees of effort, levels of commitment, and efficiency and effectiveness of recovery at the local time periods represented by these phases. This chart level is shown in Figure 1, which focuses on the shows just three stages to make its points, but in fact various levels of government and the major determi- there probably are many small peaks and troughs nants of an effective recovery. Figure 2 provides that will occur over years and decades. some additional detail about the three main determinants of an efficient recovery. It should be noted Earthquakes are special that, of the three main elements, no one was suffi- Unlike many other natural disasters, earthquakes cient to ensure an effective recovery; but elements 1 usually involve a sequence of events (foreshocks, and 2 together would allow a community to acquire main shocks, aftershocks) and often are accompa- the third element. nied by related hazards, such as tsunamis, landslides, and liquefaction. Both the earthquake sequence and Recovery that includes commitment to the related hazards may occur over a period of years. mitigation Usually there is no one discrete event (such as a Subsequently, I was engaged in fieldwork in South cyclone) that is quickly over, so that recovery clearly Carolina, where heavy damage occurred from can begin. Moreover, aftershocks not only can cause Hurricane Hugo in 1989. At that time, I was con- significant damage, but also are recurring reminders vinced that while the efficiency of recovery is of risk and often cause earthquake victims to relive important, so is the quality. In the case of a major their fearful moments. earthquake, an effective recovery process should incorporate mitigation measures, such as seismic- In my opinion, planning and managing recovery resistant building codes, that would protect human from a major damaging earthquake is the most health and safety in the case of another seismic complex and complicated recovery process from a event. These should be done, not just building by natural disaster that exists. The aftermath of a major building, but to encompass entire segments of the damaging earthquake poses special needs and community. problems — including not knowing just when the event is over; the inherently frightening experience

FEDERAL AND STATE C. KNOWLEDGE OF WHAT TO DO INFLUENCE AND CONDITIONS ❑ EMERGENCY MANAGEMENT CAPABILITY ❑ HAZARD SPECIFIC EXPERIENCE

RECOVERY AND MITIGATION A. PERSONAL LEADERSHIP B. ABILITY TO ACT ❑ POLITICAL ❑ ADMINISTRATIVE COMMUNITY NEEDS AND ❑ ❑ TECHNICAL DEMANDS FOR ACTION ADMINISTRATIVE ❑ COMMUNITY ❑ RESOURCES

DYNAMIC FORCES PLANNING AND IMPLEMENTATION OUTCOME

Figure 1: Elements of the recovery process (adapted from Rubin et al., 1985)

99 Wellington After the Quake

tal negotiations regarding the restoration of PERSONAL LEADERSHIP Local decision making major local public buildings was docu- Priority of intergovernmental relations mented. Many recent earthquakes have Redevelopment of damaged area revealed a great need for better inter- Long-range view of rebuilt community governmental coordination, and specifically ABILITY TO ACT for ways and means for public agencies to Availability of state and federal resources cut through restrictions, act flexibly, and try Reliance on local rather than external resources Local administrative and technical capability to facilitate the deployment of resources in Horizontal and vertical intergovernment relationships areas where they can do the most good. KNOWING WHAT TO DO Familiar with requirements for state, federal assistance In the Rocky Mountain Model (Figure 3), the Identification of sources of assistance greatest competence in post-earthquake Realistic, flexible and current preparedness plans recovery and mitigation is the highest and most-difficult-to-achieve stage, Stage III. Figure 2: Key elements of the recovery process (from There are many reasons for the added Rubin, 1991) difficulties, including the fact that the three elements of efficient recovery — personal of having aftershocks occur for months or years; and leadership, ability to act, and knowing what to do — usually the need to review the adequacy of some are all more difficult to acquire or perform after a fundamental governmental regulations, such as land- major damaging earthquake. Some characteristics of use controls and building code and construction that more difficult recovery are: standards. There is also a complex web of inter- organisational and intergovernmental complexities. •Greater foresight, vision and persistence are Responding to and recovering from a major damag- needed by local public leaders when recovering ing earthquake may be longer and harder than recovering from any other natural disaster agent. Enablers

In the recent report by the US National Education/training Technical information Academy of Science, on Practical Professional technical assistance Lessons from the Loma Prieta Specialised training (eg seismic) Earthquake, the complexity Peer assistance Consultants and experts of the intergovernmen- State hazard mitigation officers Enablers III Training courses VISIONARY/COMMUNITY Peer exchangers BETTERMENT Documents Exercises Educational materials

II FORESIGHT/MITIGATION

I Drivers County codes/regulations/laws MINIMALIST/RESTORATION State laws and regulations NFIP requirements Community actions Individual insurance Presidential declaration Drivers IIIMT report State hazard mitigation plan County codes/regulations/laws State laws and regulations NFIP requirements Community actions Individual insurance Presidential declaration IIIMT report State hazard mitigation plan

Figure 3: The Rocky Mountain Model of recovery following a disaster

100 Claire B Rubin

from a major damaging earthquake (which is a • whether or not an incident is one discrete disaster low-probability high-impact event). event, or multiple, cumulative events; • Long-term interest, public will and local capacity •the breadth of the event (the greater the number will be needed to achieve and sustain the legisla- of jurisdictions or amount of inhabited territory, tive changes necessary and then the implementa- the greater will be the competition among them tion and enforcement of new laws and regula- for resources); tions, particularly those dealing with building •the organisational and personal capability of the standards and land-use regulations. recovery planners; • Considerable local public capacity, skill and •the financial and other hard resources available patience are needed in order to manage the to the impacted jurisdictions; recovery efficiently and effectively. • time of year, weather and seasonal factors; and •A greater amount of damage and a longer-term recovery period can be expected. The duration of •special populations impacted. the recovery will depend on the amount of structural damage and on the number of personal Recovery is community building in a telescoped injuries and deaths. Both are likely to be great timeframe — rebuilding major parts of the commu- after a major earthquake. nity in the highly compressed period of years, when the original construction took place over generations or centuries. Implications

The snapshots of some local and state capacity Priority setting and timing decisions levels, as depicted in the recovery model, reflect stages of mitigation capacity, suggesting a great deal The need to attend to several major sectors of civic of hard, time-consuming work is ahead for most and economic life simultaneously is going to have a communities in order to be able to effectively deal significant effect on any timescale that can be set for with and recover from a major, damaging earth- recovery in Wellington. I created a community quake. In the US, Peter May (May, 1991) has planning matrix after spending time in the city of identified the basic dilemma underlying earthquake Homestead, Florida, after Hurricane Andrew in policy design and implementation: 1992. That small city (population about 28,000) was the most badly damaged community I have ever On the one hand, federal officials have a seen — about 80 to 90 percent of every sector, strong stake in promoting earthquake risk residential, commercial, governmental (civilian and reduction and preparedness, if only to lessen military), was badly damaged or destroyed. In other federal disaster relief outlays. On the other words, the ratio of damage in all domains of munici- hand, local governments and individuals pal life was extremely high. While Wellington may owning property in earthquake prone areas not suffer such a high ratio of damage to all do- are reluctant implementors of risk reduction mains, nevertheless it is important to review all measures, both because of the costs involved sectors of the community to determine priorities for and because earthquakes are low on their list reconstruction, ideally in advance of a major disas- of priorities. In overcoming this lack of ter. No sector can be let go — all need attention and momentum, federal policy must seek to will demand it, so priorities must be set. building nonfederal commitment to risk reduction and to improve nonfederal capacity The Community Recovery Matrix (Appendix 1) was to carry out appropriate mitigating actions. created to help local public officials anticipate the [p.269] many aspects of reconstruction and recovery. Although it was provided after the major disaster Timetable occurred, such a matrix could be used to consider the types and numbers of decisions that will have to In the past, some researchers have shown a straight made with respect to the rebuilt community. I have line of recovery steps, but my research over the past revised the original version of the matrix to include decade or so has not revealed such a progression. some of the special considerations pertinent to There are many variables: Wellington and to broaden some of the US-specific

101 Wellington After the Quake references. Some aspects that I want to highlight All too few places have taken that early step. Some include: of the numerous variables that will affect Welling- ton’s recovery, as a major city and as the nation’s • many problems need attention at the same time capital, include the nature of the community’s and will be competing for the same resources; economic base, the effectiveness of the civic leader- • it highlights the need for tradeoffs and priority ship, the post-disaster condition of the natural setting; environment and the political context — including •the rebuilding plans of all sectors will be re- the ability and willingness to act on the part of stricted by such practical matters as local debris officials at each level of government. removal capacity, the number of local construc- What is important to the local community, particu- tion companies and the amount of building larly to its economic base, must be decided locally. material supplies available. Nevertheless, the local officials are likely to be As can be seen in Appendix 1, the left column lists dependent on the national government and private recovery needs or possible actions and the right side sector for funding and other assistance. What will provides a time frame for planning and implementa- make recovery difficult in Wellington after a major tion. The items in the left column are provided to earthquake is that several major segments of the give a framework for thinking about recovery; there community base — government centre and associ- may be more or fewer categories of concern than the ated organisations, industrial enterprises, transporta- ones shown in the matrix and outlined in Figure 4. tion infrastructure and residential structures — are For those interested in a more detailed form of likely to be severely impacted. It will be essential guidance, I recommend the recent, well-written that priorities are predetermined, so that scarce handbook prepared by the State of California, called resources for debris removal, construction activities, Earthquake Recovery: A Survival Manual for Local financial support, etc. be marshalled to meet the Governments. predetermined priorities for restoration.

Some recovery decisions are driven by the private The case of Wellington sector to accommodate economic needs. In disaster- Officials in Wellington (at each level of govern- impacted places that are heavily dependent on ment) have a decided advantage regarding recovery tourism, for example, one may see that expensive planning, because they have begun early to plan residential hotels are rebuilt substantially before their strategy(ies) to deal with the recovery process. residential rebuilding for citizens has occurred and shops featuring high-priced luxury goods may take priority over other retail stores. These actions represent a choice to attract 1. Overall Considerations income-producing tourist attractions as a A. Information needed (about impact, needs, etc.) priority. These decisions seem surprising B. Economic and job base assessment at first, but may be appropriate given the C. Recovery planning (urban master plans, documenting of local circumstances and priorities in the expenses, mitigation efforts) long run. D. Building and construction issues (changes in land use regulations, building codes and standards) A special consideration in the case of E. Public and private finance (revenue and cost estimates) Wellington is that as the national capital 2. Housing concerns (damage assessments and new requirements) it has a high level of government pres- 3. Business concerns (temporary relocation, recovery assistance) ence and is home to not only national 4. Public sector, services and facilities government buildings but also national A. Local government associations and other organisations B. State/provincial/regional governments connected with the national government. C. National government What must be planned for is the restora- 5. Health, welfare, and other needs tion (or if need be the temporary reloca- 6. Environmental and ecological problems/needs (air, water, soil tion) of major government buildings and quality issues) workers during the recovery period. For example, given the existing reliance on Figure 4: Recovery needs/possible actions telephones and telecommunications, how

102 Claire B Rubin vulnerable will the existing communications among priate means and costs of repairing the structural governmental organisations be? How readily can damage to those historic structures has entailed years offices and organisations relocate and expect to of negotiations and ultimately lawsuits against the function? The downside to a heavy dependence on federal government. The Federal Emergency electronic equipment is that outages of service can Management Agency (FEMA), which was going to cause major, costly problems. Yet on the other hand, pay most of the cost of repair, favoured a less costly it may be that employees can operate from mobile repair process, while local officials in both cities centres or get their work done by telecommuting favoured more substantial and more costly seismic- from home. After the Northridge earthquake in resistant retrofit. The resulting intergovernmental California, many alternative means of working disagreements and litigation has meant not only outside the base workplace were tried. years of delay in deciding what to do about those landmark structures but also less efficient function- Nevertheless, if there is major damage to important ing of local government agencies during the recov- governmental buildings, one can anticipate that a ery period. Regarding the Loma Prieta earthquake, a large amount of time will have to be spent by public major recommendation made afterwards was that officials at all levels of government who are respon- what was needed was “judgment and flexibility sible for rebuilding and negotiating their redevelop- specific to the conditions of each building as needed ment plans in order to restore key public services. to foster recovery.” (National Research Council, Bear in mind that, at the same time as extraordinary 1994, p.24) demands for government services of all kinds are being made, some of the government agencies may Timing of recovery themselves be disaster victims — that may mean loss of usual office space, equipment and records, Regarding setting a timetable for recovery, I suggest temporary relocation and other unsettling work starting that process by using a planning matrix for conditions. Although government buildings and assessing local needs and setting priorities for workers may be victims of earthquake damage, they attention and resources. One cannot set a precise must still both perform their regular work and plan timetable for an endeavour that has countless for moves and repairs the same as individual citizens decisions being made by many actors, but one can and households must do. It also may be that a set priorities. Furthermore, the availability of certain government worker may be a disaster victim both at resources will determine the sequence of recovery home and at work. (This was true in Homestead, steps. In short, there can be no fixed schedule — Florida, where about one-third of the staff in the city recovery will occur sooner or later, but there are hall had been displaced from their homes.) The many things that can be done in advance to deter- Mexico City earthquake of 1984 resulted in the mine major interests, priorities for redevelopment destruction of a substantial number of federal and recovery efforts. To date, such planning is rarely offices; the accounts of that earthquake should be done at the local level. reviewed for useful lessons regarding recovery when significant damage has been done to the administra- In the United States, when a disaster warrants tive capacity of the national government. national attention, the impacted (and overwhelmed) local and state governments request federal assist- While I have not observed the recovery planning ance. When the President declares the event a process in a city that is a major capital, one could disaster, then federal agencies, resources and the anticipate that bureaucracies are not likely to move Federal Response Plan (FRP) come into play. At this quickly in major decisions regarding major capital time, the US government does not have a recovery investments, or perhaps even relocation decisions, plan, although work is currently under way on unless some pre-planning and various forms of creating such a plan and linking it with the FRP. It is agreement were in place in advance of the antici- interesting to note that the US government has been pated major disaster event. involved in response activities for more than 30 years, although the coordinated FRP is less than five I can cite two poor examples of intergovernment years old. Moreover, after more than three decades decision making post-disaster in the US: after the of dealing with disasters, the federal government is Loma Prieta earthquake (1989) caused major just coming to grips with its involvement in the damage to the city hall buildings in San Francisco recovery process for its states and cities. FEMA is and Oakland, California, decisions about the appro- coordinating a federal interagency planning process

103 Wellington After the Quake to deal with recovery assistance to states and local Earthquake Commission of New Zealand. 1992. governments, and an outcome is probably a year Potential Earthquake Loss Estimates for the EQC away. Derived Using Different Attenuation Models for Mercalli Intensity. Conclusion May, Peter J. 1991. “Addressing public risks; federal In various after-action reports and case studies of earthquake policy design.” Journal of Policy major disasters in the US, the points usually made Analysis 10(2): 263-285. include: National Research Council (US). 1994. Practical •recovery planning was sorely lacking; Lessons From the Loma Prieta Earthquake. Wash- •too many ad hoc decisions are made; and ington, DC: National Academy Press. • decisionmaking is characterised by linear Ohlsen, Christine and Claire B Rubin (eds.) 1993. thinking rather than systematic approaches. Planning for disaster recovery. Management Among the practical lessons learned from past information report. International City/County earthquake events are that the normal ways of doing Management Association, Washington, DC. 25(7). business are not adequate to accommodate the Parr, Arnold R. 1994. Insurance and Natural needs, particularly in terms of the pressure for speed Disasters: An Examination of the New Zealand in approving projects and the volume of applica- Earthquake and War Damage Commission. Natural tions, to name only two areas of special need. A Hazards Center, University of Colorado, Boulder, final thought to ponder is: why is it that all levels of Colorado. government fail to give as much attention to disaster recovery plans as they do to disaster preparedness Rubin, Claire B, Daniel Barbee and Martin Saper- plans? stein. 1985. Community recovery from a major natural disaster. Monograph No. 41. Natural Fortunately, there are knowledgeable and committed Hazards Research and Applications Information people in New Zealand; these are very important Center, University of Colorado. resources. If they can add experience with disasters, real or simulated, their abilities will be enhanced. Rubin, Claire B. l991. “Recovery from disaster.” In Principles and Practice of Emergency Management. I leave you with the wry words of an American Washington, DC: International City Management cartoon character named Pogo: “We are surrounded Association. by insurmountable opportunities.” Rubin, Claire B and Roy Popkin. 1991. Disaster Bibliography recovery From Hurricane Hugo. Special Publication Britton, Neil R and John Oliver (eds). 1993. Cata- No. 69. University of Colorado. strophic Insurance for Tomorrow: Planning for Rubin, Claire B. 1993. “Local public capacity to Future Adversities. Proceedings of a seminar at deal with a catastrophic earthquake.” In Improving Griffith University, sponsored by Sterling Office Earthquake Mitigation: Report to Congress. Wash- (Australia) Ltd., Brisbane. ington, DC: Federal Emergency Management Centre for Advanced Engineering. 1991. Lifelines in Agency. Earthquake: Wellington Case Study. Project Sum- mary. Christchurch: University of Canterbury.

Earthquake Commission of New Zealand. 1990. Study of Potential Losses of the EQC in Large Earthquakes in Central New Zealand.

Earthquake Commission of New Zealand. 1991. Study of Potential Losses to the EQC from Damage to Housing in Large Earthquakes in Central New Zealand.

104 Claire B Rubin

Appendix 1

Community recovery matrix

prepared by Claire B Rubin

February 1995

105 Wellington After the Quake

➝

Year 2

1 = least important

10 = most important

Year 1 (Months)

1234567891011121

posal

learance

emoval

external assistance (mutual aid, contractors, etc.)

major factories, military bases, government centers and other major employers agricultural, botanical products

demolition and debris •c •r •dis • legal issues, e.g., ordering evacuation; resettling “illegal” occupants revise population data; determine relocation needs; gather new data, e.g., school children, residents, business establishments, etc. damage assessment and personal needs assessment means of informing the public documentation of expenditures, city personnel, etc. regulation (building permits) and control (out of town contractors; pets and animals; materials) managing disaster assistance from external (public and private) sources managing resources (donated goods and services, volunteers)

analysis of major employers; likelihood of return, when, and at what ratio of former capacity? • •

Information Needed Regarding: 1.

2. 3. 4. 5. 6. 7. 8. 9. Economic and Job Base Assessment 1.

Overall Considerations A.

RECOVERY NEEDS/POSSIBLE ACTIONS I.

106 Claire B Rubin

➝

Year 2

1 = least important

10 = most important

Year 1 (Months)

1234567891011121

eview organizational mechanisms in place; determine new ones

commercial, retail establishments

needed (e.g., housing authority, redevelopment authority) augment capacity for intergovernmental relations, including countless meetings to be attended determine consultants and other specialists needed to augment local staff to engage in aggressive pursuit of grant and assistance funds, other specialized functions

• plan for economic base and job generation activities: e.g., economic development activities and organizations; participation in rebuilding efforts seek consultants and other specialists needed; get help with pursuing sources of public and private assistance to small businesses use existing plans (master plan, economic development plan, etc.) to extent possible in creating redevelopment plans for badly damaged areas or for community as a whole assess local administrative capacity to deal with recovery: •r • •

determine mitigation measures that could be taken, or must be met by law during reconstruction, e.g., building codes and land use regulations manage special bookkeeping and accounting needed for potential reimbursement designate a coordinator of pro bono professional services offered to city by public management, engineering societies, architects, researchers, etc. coordinate with business and industry

3. Recovery Planning 1.

4. 5.

RECOVERY NEEDS/POSSIBLE ACTIONS

107 Wellington After the Quake

➝

1 = least important

10 = most important

hs) Year 2

Year 1 (Mont

1234567891011121

create or revise building codes and standards to meet government requirements regarding seismic-resistant construction enact codes and standards for new residential and business units to be constructed explain and enforce new standards attend to non-conforming and exceptions needed identify and evaluate alternative (and innovative) types of construction, e.g., modular unit, special units decide how to license, monitor and otherwise control large numbers of building contractors, for both new construction and repairs decide how to manage the building permit process (including consideration of a moratorium) estimate remaining tax base revise estimates of revenues estimate costs of disaster-generated projects, activities identify likely sources of disaster funds project budget for coming year identify new sources of additional revenue (tax increase, bond issue, private funds) coordinate public and private services

Building and Constructing Issues 1. 2. 3. 4. 5. 6. 7. Public and Private Finance 1. 2. 3. 4. 5. 6.

7. Assessment of usable existing housing stock Determination of new types of housing and housing patterns to be used for new construction (e.g., planned unit development)

Housing Concerns A. B.

RECOVERY NEEDS/POSSIBLE ACTIONS

108 Claire B Rubin

➝

Year 2

1 = least important

10 = most important

Year 1 (Months)

1234567891011121

Public buildings and facilities (repair and restoration) Public policy regarding sighting of new facilities Communications, utilities, and other essential services (repair and restoration)

Determination of repair, restoration and restructuring

Determination of sources of temporary housing units Determination of sources of permanent housing Development of low and moderate income units Consideration of past social and neighborhood patterns: recognition of previous housing patterns, preferences of former residents regarding street and neighborhood patterns, priorities for former residents to return to reconstructed neighborhoods Assessment of usable business locations, establishments Identification of government assistance to aid impacted businesses Determination of new types of construction to be used in repairing and rebuilding damaged firms Building and construction issues: e.g., compliance with revised building codes and construction standards that must be used to ensure future disaster assistance from governmental sources Seek all sources of financial assistance to assist return of existing business and to attract new ones

Local 1. 2. 3. State/provincial/regional/national government building and facilities 1.

Business Concerns

Public Sector

C. D. E. F.

A. B. C. D.

RECOVERY NEEDS/POSSIBLE ACTIONS

109 Wellington After the Quake

➝

1 = least important

10 = most important

hs) Year 2

Year 1 (Mont

1234567891011121

Relocation decisions

estimate need for determine providers, sources of funding estimate need for determine providers, sources of funding

estimate need for welfare, food assistance, unemployment benefits determine providers of care and services and also sources of funding

Social services 1. 2. Health services (physical and mental) 1. 2. Public assistance 1. 2.

Air quality (open air burning) Water (quality and supply) Solid waste (landfills — temporary and permanent) Soil conditions (contamination) Hazardous materials (spills, accidents, disposal) incidents triggered by earthquakes Natural resources (wildlife, fish, plants)

Environmental and Ecological Problems/Needs

Health, Welfare and Other Needs A.

A. B. C. D. E. F.

RECOVERY NEEDS/POSSIBLE ACTIONS

110 David Hopkins

Assessment of resources required for reinstatement

David C Hopkins

Director, Buildings Division, Kingston Morrison Limited, Wellington

The process of restoring Wellington to normality after an earthquake will involve work on all elements of the built environment. This paper describes the assessment of the costs of repairing damaged buildings and infrastructure and then presents an analysis of the materials, plant and labour needed for reconstruction.

Buildings and infrastructure in the Wellington region are briefly described and their replacement values presented in various categories. Damage in dollar terms is assessed for each category, using existing knowledge of the likely effects of movement of the Wellington Fault, available damage ratio information and engineering judgment.

The assessment of the type and amount of resources needed is made by broadly analysing the work content of each element of the repair work and allocating the required expenditure to various categories of materials, plant and labour. These categories are chosen to match those normally used in resource assessment in the building industry.

The total resources likely to be needed for full reinstatement after a major earthquake in the capital are thus presented in a form suitable as a starting point for assessing the implications for timing, availability and supply/demand.

Introduction extend this information to make a broad assessment of damage to the total built environment. Wellington’s ability to recover from a major earthquake will depend on the nature and extent of But such an overall summary is only the first step in damage, the overall costs involved, the resources assessing the resources required for reconstruction, a required and their availability, the economic im- task that has not been attempted to date, and to this pacts, the time taken to reconstruct and repair extent this paper breaks new ground. However, the damaged facilities and the logistics of applying purpose is to quantify the resources required, not to resources to the task. present original work on damage assessments, except where these do not exist. The basic intention This paper presents an estimate of the resources has been to take existing data on damage, extend it required, based on the analysis of the estimates of to ensure it covers the whole of the Wellington the cost of restoration and the nature of the work region affected by the Wellington fault earthquake involved. It makes no attempt to address issues of and then to analyse the requirements for resources availability of resources or other issues affecting from the dollar amounts. recovery and restoration. Assessment of damage has been made possible Over the last decade, and particularly in recent through the work of several researchers funded by years, increasing interest has been shown in esti- the Earthquake Commission, the Wellington Re- mates of earthquake damage losses in New Zealand. gional Council and others. This has provided the Changes in the insurance market and in the owner- geological, soils, seismicity and damage ratio data ship and management of building and infrastructure for much of what is presented. assets have given this special impetus. As a result, a number of separate assessments of damage have been made for various groups of assets in the Wellington’s buildings and Wellington region. Not all assets have been covered infrastructure and not all results are available in the public domain. The Wellington region today comprises four main However, sufficient information now exists to cities, Wellington, Lower Hutt, Upper Hutt and

111 Wellington After the Quake

Porirua, which account for the majority of the to medium-sized structures. The result is a wide population in the whole region. The main areas of range of building sizes and types, built to different population are shown in Figure 1. The topography is codes. generally steep with limited flat areas — most of the flat areas on the edge of the harbour are reclaimed Lifelines have not generally been subject to the same land. level of attention for seismic design, except bridges for road, rail, water supply and electricity generation The early European settlers built in timber, matching and transmission facilities. Thus, vulnerability of familiar European styles and taking advantage of lifelines in the region is highly variable. A major abundant natural timbers. After a damaging fire, study of Wellington’s lifelines, completed under the emphasis turned to building in brick, which in time auspices of the Centre for Advanced Engineering proved to be vulnerable to earthquake. After the (1991), provides a comprehensive overview of all devastating Hawkes Bay Earthquake of 1931, codes the systems and their vulnerability to earthquake. were introduced requiring design for earthquake Since that time, several studies of likely damage to loads. In 1965, 1976, 1984 and 1992, changes were selected lifelines have been carried out by the made to code requirements, each bringing more organisation responsible for them. In many cases, complex and generally more stringent requirements this has been followed up with mitigation measures, to deal with the greater sophistication of buildings with the result that most Wellington lifelines have and to take advantage of the ever-increasing knowl- received or are receiving attention. Recent earth- edge of their earthquake performance. quakes in California have added to the impetus of this gratifying trend, and it seems likely that the Houses in the Wellington region are generally built experience in the Hanshin (Kobe) earthquake of in timber and masonry, while most larger buildings January 1995 will have particular relevance to are constructed in the indigenous material, concrete. Wellington lifelines. Structural steel has not been used extensively except for industrial buildings, though more use is now In summary, Wellington has a wide variety of being made of that material. Structural timber and buildings and infrastructure in various geological concrete masonry are also commonly used for small- settings. An indication of the size of Wellington can be gleaned from Table 1, which summarises the buildings and infrastructure, 1 showing the approximate value of Mana Island facilities in replacement cost terms. This has been obtained in most cases directly

58 from the authorities responsible for the PORIRUA assets; their ready cooperation is ac- Haywards UPPER knowledged. 2 HUTT

1 Earthquake damage

Johnsonville assessment Khandallah Petone Ngaio LOWER HUTT The seismicity of Wellington is relatively Somes Island well known, and much research has been Karori WELLINGTON done in assessing damage of buildings for S various possible earthquakes. It is beyond E Brooklyn Miramar G Kilbirnie N the scope of the paper to discuss this A Island R aspect, but one of the most damaging Bay A K earthquakes is movement of the Welling- Pencarrow A Head T Sinclair Head U ton Fault. This event has been used in M I R making the damage assessments. Isoseis- mals used for this event in previous Baring Head Palliser Bay reports to the EQC are shown in Figure 2 Main urban areas and may be taken as applying to the data Airport Turakirae Head presented. Figure 1: The Wellington region

112 David Hopkins

Damage due to fire following earthquake was Palmerston North assessed to be 1 percent of replacement value for buildings and contents only, based on the report by Marsh and McLennan (1991). To highlight its MM7 inclusion in the figures, damage due to fire follow- Masterton ing earthquake has been shown separately. Nelson MM8 Overall damage ratios (DR) are given for each group MM9

MM10 of assets. For buildings, these have been taken from Blenheim Wellington the overall results and the damage ratio curves used by Dowrick (1992) and from values derived from the Applied Technology Council (ATC, 1985). General values derived for other assets from a report by Holmes Consulting Group and DSIR to EQC (1991), and from Andrews and others (1993). Values Figure 2: Isoseismals for Wellington fault event for airport and rail infrastructure were taken from reports by Kingston Morrison (1993,1994). Where The overall damage assessment made for the no studies had been done, assessments were made purpose of this paper was based on a mixture of based on ATC (1985) and on specific assessments of data, including reports done for the EQC on build- assets of that type in available reports. The values ings and infrastructure, and the work of the author chosen represent reasonable estimates of likely on behalf of Kingston Morrison for various clients. damage, but even these should be interpreted in the The assessments have been made on a broad basis, light of the wide margin of uncertainty which exists assigning a single damage ratio to each main class of in the derivation of damage ratios. asset. The objective has been to obtain a reasonable assessment of overall damage without necessarily matching previously derived values exactly. Assessment of resources required The assessments of the resources required for The assessments are made on the basis that Welling- reconstruction were obtained by a progressive ton would be put back the way it was. No attempt splitting of the dollar amounts in each category of has been made to allow for obsolescence, current asset. Steps were: under-utilisation of facilities or any reduced demand for facilities in Wellington following the earthquake. Step 1 — Split into reconstruction sub- These will all be significant factors, but for the sake categories of simplicity have not been factored in. If it is necessary to make such allowances, then these can Building damage was split into sub-categories be made on a global basis by increasing or decreas- according to the nature of the likely reconstruction ing the derived figures accordingly. or repair. This did not match exactly the sub-division used for the damage assessment, and the relationship Table 1 shows the overall assessments of damage in between these two splits is given in Table 2. For dollar terms for the asset categories. each main building category, a distinction was made between complete replacement and repair, since the The categories chosen correspond to the way in split of resources was seen to be different in each which the data was received from the available case. For commercial buildings, the repairable sources, and, except for buildings, these correspond buildings were split into those with more than 30 to categories of damage ratio. The values used are percent damage and those with less. Those with the replacement values and were provided without an higher damage were assessed as requiring propor- explicit contents value. The value of contents has tionately more work on the superstructure than those been derived from data in reports to the EQC and with the lower damage. have been taken as 21 percent of the building value in the case of commercial, industrial and rural Although an assessment of the cost of damage to buildings and 50 percent of the value for residential contents was made, no analysis for materials, plant buildings and flats. The same damage ratio has been and labour was made for contents damage. applied to the total of building value and to contents in each case.

113 Wellington After the Quake

Table 1: Replacement and damage values (all figures in NZ$M)

Item Wellington Hutt City Upper Hutt Replace DR Reinstatement Replace DR Reinstatement Replace DR Reinstatement A Buildings 1. Commercial and Industrial 15,058.8 0.18 2,710.6 3,668.0 0.15 550.2 739.2 0.15 110.9 2. Residential 6,371.0 0.15 955.7 3,095.0 0.12 371.4 1,148.4 0.12 137.8 3. Flats 1,809.9 0.13 235.3 917.1 0.10 91.7 277.2 0.10 27.7 4. Other (Public) 386.1 0.18 69.5 179.6 0.15 26.9 72.6 0.15 10.9 5. Rural 72.5 0.10 7.3 74.6 0.10 7.5 168.3 0.10 16.8 6. Building Contents 7,349.1 1,359.1 2,829.7 427.4 918.6 147.6 7. Consequential Fire Losses (1%) 39.8 10.5 3.0 Total 23,698.3 3,978.3 7,934.3 1,047.7 2,405.7 304.1 B Roading 1. Regional 2. District 476.0 0.08 38.1 66.0 0.08 5.3 94.6 0.08 7.6 3. Suburban in B2 above 220.9 0.15 33.1 in B2 above Total 476.0 38.1 286.9 38.4 94.6 7.6 C Bridging 1. Regional 2. District 3.0 0.30 0.9 43.0 0.30 12.9 15.7 0.30 4.7 Total 3.0 0.9 43.0 12.9 15.7 4.7 D Rail Network 1. Formation (incls track, tunnels bridges, etc) 2. Signals, communications, power 3. Ways and Works Mech Items 4. Locos, rolling stock, misc Total E Airport Infrastructure 1. Runways, Taxiways, Etc 2. Seawall and other Civil Works Total F Port Infrastructure 1. Wharves, Structures, Etc 306.0 0.20 61.2 2. Cranes/Equipment 36.0 0.20 7.2 3. Containers/Contents 60.0 0.10 6.0 Total 402.0 74.4 G Water Supply 1. Reticulation 283.4 0.08 22.7 81.5 0.08 6.5 35.3 0.08 2.8 2. Distribution/Storage 56.1 0.10 5.6 10.3 0.10 1.0 6.2 0.10 0.6 3. Pumping Stations 2.8 0.10 0.3 0.8 0.10 0.1 in G1 above 4. Plant and Misc Buildings 2.0 0.10 0.2 0.8 0.10 0.1 0.10 0.0 Total 344.2 28.8 93.4 7.7 41.5 3.4 H Sewerage 1. Reticulation Main 379.0 0.15 56.9 70.6 0.08 5.6 in Hutt City 2. Local Reticulation in H2 above 95.2 53.3 0.08 4.3 3. Treatment Stations 5.0 0.20 1.0 in H2 above 0.1 0.20 0.0 Total 384.0 57.9 165.8 5.6 53.4 4.3 I Stormwater Reticulation 1. Reticulation 250.0 0.12 30.0 95.0 0.08 7.6 46.3 0.08 3.7 Total 250.0 30.0 95.0 7.6 46.3 3.7 J Gas Network 1. Regional 330.0 0.04 13.2 2. Local 55.5 0.08 4.4 47.2 0.08 3.8 16.1 0.08 1.3` Total 385.5 17.6 47.2 3.8 16.1 1.3 K Electricity Network 1. Regional Reticulation 2. Local Reticulation 447.0 0.12 53.6 139.0 0.10 13.9 51.0 0.10 5.1 3. Nodes Total 447.0 53.6 139.0 13.9 51.0 5.1 L Telecommunications 1. Buildings and Plant 269.0 0.20 53.8 49.0 0.15 7.4 20.0 0.15 3.0 2. Reticulation 100.0 0.08 8.0 66.0 0.08 5.3 30.0 0.08 2.4 Total 369.0 61.8 115.0 12.6 50.0 5.4 M Broadcasting 1. State owned 2. Private Total 0.0 0.0 0.0 0.0 0.0 0.0 GRAND TOTALS Without Building Contents 18,815.7 2,923.5 5,901.5 707.6 1,767.9 184.8 With Building Contents 26,164.8 4,282.6 8,731.2 1,135.0 2,686.5 332.5

114 David Hopkins

Table 1 (continued)

Item Porirua Regional Totals Replace DR Reinstatement Replace DR Reinstatement Replace Reinstatement ABuildings 1. Commercial and Industrial 770.0 0.15 115.5 20,236.0 3,487.2 2. Residential 1,599.5 0.12 191.9 12,213.9 1,656.8 3. Flats 177.8 0.10 17.8 3,182.0 372.5 4. Other (Public) 66.6 0.07 4.7 704.9 112.0 5. Rural 55.5 0.10 5.6 370.9 37.1 6. Building Contents 1,075.9 148.2 0.0 0.0 12,173.4 2,082.3 7. Consequential Fire Losses (1%) 3.4 56.7 Total 2,669.3 335.4 36,707.6 7,804.5 B Roading 1. Regional 670.0 0.08 53.6 670.0 53.6 2. District 95.0 0.08 7.6 731.6 58.5 3. Suburban 220.9 33.1 Total 95.0 7.6 670.0 53.6 1,622.5 145.3 C Bridging 1. Regional 360.0 0.30 108.0 360.0 108.0 2. District 5.0 0.30 1.5 66.7 20.0 Total 5.0 1.5 360.0 108.0 426.7 128.0 DRail Network 1. Formation (incls track, tunnels bridges, etc) 1,605.9 0.07 104.9 1,605.9 104.9 2. Signals, communications, power 213.8 0.18 38.4 213.8 38.4 3. Ways and Works Mech Items 55.1 0.20 11.0 55.1 11.0 4. Locos, rolling stock, misc 795.5 0.03 23.9 795.5 23.9 Total 2,670.3 178.2 2,670.4 178.2 E Airport Infrastructure 1. Runways, Taxiways, Etc 42.1 0.08 3.5 42.1 3.5 2. Seawall and other Civil Works 60.4 0.06 3.7 60.4 3.7 Total 102.5 7.3 102.5 7.3 F Port Infrastructure 1. Wharves, Structures, Etc 306.0 61.2 2. Cranes/Equipment 36.0 7.2 3. Containers/Contents 60.0 6.0 Total 402.0 74.4 GWater Supply 1. Reticulation 33.0 0.08 2.6 167.1 0.08 13.4 600.3 48.0 2. Distribution/Storage 6.0 0.10 0.6 67.8 0.10 6.8 146.4 14.6 3. Pumping Stations 0.7 0.10 0.1 20.6 0.10 2.1 24.8 2.5 4. Plant and Misc Buildings 0.3 0.10 0.0 5.9 0.10 0.6 9.0 0.9 Total 39.9 3.3 261.4 22.8 780.4 66.0 H Sewerage 1. Reticulation Main 38.0 0.08 3.0 487.6 65.5 2. Local Reticulation 148.5 4.3 3. Treatment Stations 18.1 0.20 3.6 23.2 4.6 Total 56.1 6.7 659.3 74.4 I Stormwater Reticulation 1. Reticulation 15.1 0.08 1.2 406.4 42.5 Total 15.1 1.2 406.4 42.5 JGas Network 1. Regional 0.2 330.0 13.4 2. Local 18.4 0.08 1.5 137.2 11.0 Total 18.4 1.5 0.2 467.2 24.4 K Electricity Network 1. Regional Reticulation 807.1 0.10 80.7 807.1 80.7 2. Local Reticulation 57.0 0.10 5.7 694.0 78.3 3. Nodes 0.0 0.0 Total 57.0 5.7 807.1 80.7 1,501.1 159.1 L Telecommunications 1. Buildings and Plant 52.0 0.15 7.8 390.0 72.0 2. Reticulation 36.0 0.08 2.9 232.0 18.6 Total 88.0 10.7 622.0 90.5 MBroadcasting 1. State owned 100.0 0.08 8.0 100.0 8.0 2. Private 30.0 0.08 2.4 50.0 2.4 Total 0.0 0.0 130.0 10.4 150.0 10.4 GRAND TOTALS Without Building Contents 1,912.9 220.8 4,739.9 438.4 34,344.6 6,722.6 With Building Contents 2,988.8 369.0 4,739.9 438.4 46,518.0 8,804.9

115 Wellington After the Quake

Table 2: Summary of reinstatement and damage values for buildings (all figures in NZ$M)

Building Type Damage Ratio Category Total Commercial Industrial Residential Other (NZ$M) Commercial and Industrial 2092.3 1394.9 3487.2 Residential 1656.8 1656.8 Flats 372.5 372.5 Other 112.0 112.0 Rural 37.1 37.1 Total (No Contents or Fire Loss) 2464.8 1432.0 1656.8 112.0 5665.6

Consequential Fire Losses 24.7 14.3 16.6 1.1 56.7

Total (Including Fire Losses) 2489.5 1446.3 1673.4 113.1 5722.3 Add building contents (non included in analysis of plant, materials and labour) 2082.3 7804.5

Table 3: Summary of materials, plant and labour by asset category (includes construction costs plus planning, design, etc. and demolition, all figures in NZ$M)

Category Material Plant Labour Total Commercial Buildings — Complete Replacement 220.5 114.4 247.7 582.5 Commercial buildings — Repairs > 30% of Replacement 296.9 155.3 444.0 896.2 Commercial Buildings — Repairs < 30% of Replacement 430.4 178.0 823.1 1431.5 Industrial Buildings — Replacement 112.9 57.7 162.1 332.7 Industrial Buildings — Repairs 572.4 164.9 616.4 1353.7 Residential Buildings — Replacement 34.0 8.4 53.8 96.2 Residential Buildings — Repairs 343.3 212.7 1272.2 1828.2 Other Buildings — Total Repairs and Replacements 44.0 22.1 66.7 132.8 Roading 46.9 55.5 64.7 167.1 Bridging 45.9 31.4 82.7 160.0 Rail Network 52.9 68.9 79.6 201.4 Airport 2.1 2.6 3.7 8.4 Port Infrastructure 36.1 22.9 30.3 89.3 Water Supply 38.1 14.8 25.4 78.2 Sewerage System 33.6 17.9 30.4 81.8 Stormwater System 19.1 10.0 21.9 51.0 Gas Network 31.9 23.0 30.7 85.7 Telecommunications 52.9 18.6 37.2 108.6 Broadcasting Facilities 6.4 1.8 3.7 12.0 TOTALS 2433.6 1186.1 4105.7 7725.3

For all other assets, the splits used were the same as ment and of demolition were considered to be for the damage assessment. Table 3 lists the head- additional to the damage value, so that the total of ings used. the percentages allocated was greater than 100 percent, typically 115 percent. The elemental split Step 2 — Sub-division into activities or for buildings was chosen to match those in published elements handbooks on building costs, such as Rawlinson (1993). Each asset category or sub-category derived from Step 1 was further split into activities or elements according to the nature of the work to be done. The Step 3 — Split into materials, plant and labour total of these splits equated to 100 percent of the assessed damage. An important addition was made Each activity or element was split between materi- at this stage. The costs of planning, design, procure- als, plant and labour in proportions according to the

116 David Hopkins nature of the work involved. For instance, design Step 6 — Summation of resources required activity was set to be 100 percent labour, and This final step involved adding all the individual demolition was assessed to be mostly labour and quantities and summarising them, a task made plant, with little requirement for materials. Each relatively simple by spreadsheet technology. Final element or activity was assessed separately, with the totals are shown in Table 5. three splits adding up to 100 percent of the amount allocated to the element or activity. Discussion

Step 4 — Split into sub-categories of The values derived should be interpreted in the light materials, plant and labour of the wide possible variations in damage ratios. The application of damage ratios is valuable as an overall Once the amount for materials was determined for a planning tool, but the temptation to interpret them as particular activity from Step 3, it was further split a prediction in a particular case should be strongly into sub-categories according to the nature and range resisted. of work required. The same was done with the amounts allocated to that same element for plant and The derivation of the resources required has taken for labour. The sub-categories used here were no account of their availability or of the time likely selected to correspond to those used in the industry. to be taken to carry out the restoration work. The Categories of labour have been derived from those values derived are simply a total of resources that used by Statistics New Zealand in order to facilitate will need to be applied to complete the work. The comparison with resources likely to be available. intensity of input for any resource will depend on the Categories of material have been determined to overall timetable and the priorities assigned to match those commonly used in New Zealand and the various types of work. categories of plant have been taken from contractors’ guides to machinery available in New Zealand. It is beyond the scope of this paper to address these issues, but they are clearly crucial to the assessment A limited selection was made for each set in order to of overall ability to recover and the resulting effect limit the work involved in analysis. The main on the community. categories are covered, but it is evident that a closer and more comprehensive analysis would be possible. It is, nevertheless, clear that very considerable resources will be required and that the mobilisation Step 5 — Calculation of resource quantities and effectiveness of these resources will depend significantly on the degree of preparation and Steps 1 to 4 resulted in a series of spreadsheets, one preparedness of key asset owners and managers. for each reconstruction sub-category selected in Step Many asset owners and managers are addressing this 1. These contained dollar amounts allocated to the aspect and this conference should provide greater various sub-categories of materials, plant and labour. impetus to such efforts and should promote aware- Step 5 involved dividing these dollar amounts by a ness of the overall effect on the city of Wellington. unit rate appropriate to the allocation in order to determine the contribution of that cell to the overall Comment will no doubt be made at this conference resource requirement. For example, in the case of on the overall viability of Wellington after the concrete, the dollar amount was divided by the cost quake. One point is worth making in relation to this. of a cubic metre of concrete to give the volume of The overall damage value as a percentage of the concrete needed. total assets at risk, while significant, is unlikely to be sufficient to undermine overall confidence in the Table 4 is a sample of one spreadsheet, showing the city’s future. This is borne out by experience from detailed split of dollar amounts and resource alloca- past earthquakes overseas, which demonstrates that tions for commercial buildings with more than 30 earthquake damage, while horrendous, has not led to percent damage. This provides an insight into the significant relocation of people and assets. method used to assess the resources and into the range of sub-categories considered. It would be possible to refine the analysis of the split of resources considerably and go into more detail on All other spreadsheets were compiled along similar many of the aspects. It is hoped that this initial broad lines.

117 Wellington After the Quake

Table 4: Sample spreadsheet calculation of resources

Buildings Type Commercial Complete Replacement Damage = 20.0% of $2,489.5 M = $497.9

Planning, Design, Procurement Demolition Preliminary Substructure Percent 12.0% Percent 5.0% Percent 8.0% Percent 17.0% Value $59.75 Value $24.89 Value $39.83 Value $84.64 Materials Percent Value Quantity Percent Value Quantity Percent Value Quantity Percent Value Quantity concrete (m3) 3.0% 1.2 8,000 20.0% 16.9 112,900 timber (m3) 2.0% 0.8 800 10.0% 8.5 8,500 reinforcing steel (tonnes) 2.0% 0.8 500 10.0% 8.5 5,300 structural steel (tonnes) 5.0% 4.2 1,100 masonry, brickwork etc (m2) plaster board (m2) floor coverings (m2) windows/glazing (m2) painting (m2) plumbing and drainage($1000 units) 2.0% 0.8 800 electrical ($1000 units) 2.0% 0.8 800 mechanical ($1000 units) lifts and escalators per item fill (m3) basecourse/ballast (m3) paving (m2) Plant Percent Value Hours Percent Value Hours Percent Value Hours Percent Value Hours bulldozers 5.0% 1.2 6,600 2.0% 1.7 8,900 cranes 19.0% 7.6 108,100 3.0% 2.5 36,300 trucks 25.0% 6.2 124,500 5.0% 4.2 84,600 graders excavators 20.0% 5.0 62,200 5.0% 4.2 52,900 rollers/pavers motor scrapers loaders 5.0% 1.2 11,300 misc small tools 5.0% 1.2 124,500 15.0% 6.0 597,500 10.0% 8.5 846,400 Labour Percent Value Hours Percent Value Hours Percent Value Hours Percent Value Hours A Management 10.0% 6 . 0 4 9 , 8 0 0 0.5% 0 . 1 1 , 0 0 0 1.0% 0 . 4 3 , 3 0 0 0.2% 0 . 2 1 , 4 0 0 B Design & Contract Admin 55.0% 32.9 365,100 4.5% 1.1 12,400 4.5% 1.8 19,900 4.5% 3.8 42,300 C Trades 15.0% 9 . 0 298,700 5.0% 1.2 41,500 15.0% 6.0 199,200 8.0% 6.8 225,700 D Service Workers 15.0% 9.0 358,500 5.0% 1.2 49,800 10.0% 4.0 159,300 5.0% 4.2 169,300 E Semi qualified & Plant Ops. 5.0% 3.0 119,500 20.0% 5.0 199,200 14.5% 5.8 231,000 7.3% 6.2 247,200 F Unqualified Labour 0.0% 0.0 0 5.0% 1.2 56,600 10.0% 4.0 181,100 5.0% 4.2 192,400 Total 100.0% 59.7 100.0% 24.9 100.0% 39.8 100.0% 84.6

Notes 1) Contingencies allowed for by adding appropriate percentage (1 to 1.5%) from Rawlinsons to Preliminary 2) All costs in millions of dollars 3) Preliminary includes establishment, disestablishment, contingencies etc 4) 7% added to costs from main table to allow for consequential fire losses. 5) Rates

Labour Rate ($/hr) Materials Rate Plant Rate ($/hr) A Management 1 2 0 concrete (m3) 1 5 0 bulldozers 1 9 0 B Design & Contract Admin 9 0 timber (m3) 1 , 0 0 0 cranes 7 0 C Trades 3 0 reinforcing steel (tonnes) 1,600 trucks 5 0 D Service Workers 2 5 structural steel (tonnes) 3,800 graders 8 0 E Semi qualified & Plant Ops. 2 5 masonry, brickwork etc (m2) 100 excavators 8 0 F Unqualified Labour 2 2 plaster board (m2) 2 0 rollers/pavers 100 floor coverings (m2) 60 motor scrapers 2 2 0 windows/glazing (m2) 2 0 0 loaders 1 1 0 painting (m2) 10 misc small tools 1 0 plumbing and drainage($1000 1,000 electrical ($1000 units) 1,000 mechanical ($1000 units) 1,000 lifts and escalators per item 120,000 fill (m3) 2 5 basecourse/ballast (m3) 3 0 paving (m2) 200 attempt will encourage others to examine the issues realistically assessing the time required for recovery in a more comprehensive and detailed fashion. and for assessing the likely availability of resources to carry out the reinstatement in a particular time Other presentations cover issues of availability of frame. Because the quantities of most common resources, the time required for reconstruction, and building materials are assessed, it will provide the logistics of mobilising the required resources. separate sections of the building industry with their Ideally, none of these issues should be considered in own perspectives on the likely impacts and opportu- isolation, and it is hoped that the conference will nities. stimulate discussion on these interrelationships and come to be recognised as a starting point for further, Acknowledgements more integrated work. This paper was written at the request of EQC, who Conclusion made available much background material on damage assessments and provided encouragement. The analysis presented indicates that very consider- The cooperation of organisations responsible for able resources will be required to reinstate Welling- buildings and infrastructure in the Wellington region ton after a major earthquake. The results are pre- was extraordinary and the overall assessment could sented in a way that allows analysis of various not have been made without their readiness to recognised categories of materials, plant and labour. provide information on the nature and value of their This assessment forms a valuable starting point for assets. It is a feature of Wellington that such coop-

118 David Hopkins

Table 4 (continued)

Superstructure Finishes and Fittings Services (including external) Percent 30.0% Percent 25.0% Percent 20.0% Value $149.37 Value $124.47 Value $99.58 Totals Percent Value Quantity Percent Value Quantity Percent Value Quantity Dollars Quantities Materials 15.0% 22.4 149,400 40.5 270,000 concrete (m3) 10.0% 14.9 14,900 24.2 24,000 timber (m3) 5.0% 7.5 4,700 16.7 11,000 reinforcing steel (tonnes) 5.0% 7.5 2,000 11.73,000 structural steel (tonnes) 5.0% 7.5 74,700 7.5 75,000 masonry, brickwork etc (m2) 15.0% 18.7 933,600 18.7 934,000 plaster board (m2) 10.0% 12.4 207,500 12.4 208,000 floor coverings (m2) 20.0% 24.9 124,500 24.9 125,000 windows/glazing (m2) 10.0% 12.41,244,700 12.4 1,245,000 painting (m2) 10.0% 10.0 10,000 10.8 11,000 plumbing and drainage($1000 units) 5.0% 5.05,000 5.85,800 electrical ($1000 units) 20.0% 19.9 19,900 19.9 19,900 mechanical ($1000 units) 15.0% 14.9 120 14.9 120 lifts and escalators per item 0.00fill (m3) 0.00basecourse/ballast (m3) 0.0 0 paving (m2) Percent Value Hours Percent Value Hours Percent Value Hours Hours Plant 2.9 16,000 bulldozers 10.1 144,000 cranes 5.0% 7.5 149,400 2.0% 2.5 49,800 2.0% 2.0 39,800 22.4 448,000 trucks 0.00graders 9.2 115,000 excavators 0.00rollers/pavers 0.00motor scrapers 1.2 11,000 loaders 20.0% 29.92,987,400 8.0% 10.0 995,800 13.0% 12.9 1,294,500 68.5 6,846,000 misc small tools Percent Value Hours Percent Value Hours Percent Value Hours Hours Labour 0.2% 0.32,500 0.2% 0.22,100 0.2% 0.21,700 7.4 62,000 A Management 4.5% 6.7 74,700 4.5% 5.6 62,200 4.5% 4.5 49,800 56.4 626,000 B Design & Contract Admin 5.0% 7.5 248,900 8.8% 11.0 365,100 20.3% 20.2 673,800 61.6 2,053,000 C Trades 3.8% 5.7 227,000 5.0% 6.2 248,900 5.0% 5.0 199,200 35.3 1,412,000 D Service Workers 16.5% 24.6 985,800 16.5% 20.5 821,500 5.0% 5.0 199,200 70.1 2,803,000 E Semi qualified & Plant Ops. 5.0% 7.5 339,500 16.9 770,000 F Unqualified Labour 100.0% 149.4 100.0% 124.5 100.0% 99.6 582.5

Table 5: Summary of design, demolition and construction costs and quantities (including construction costs plus planning, design, etc. and demolition)

Dollars (millions) Quantities Materials Design Demolition Construction Total Materials Concrete (m3) 1.1 283.0 284.1 1,895,000 Concrete (m3) Timber (m3) 1.1 344.7 345.8 345,000 Timber (m3) Reinforcing Steel (tonnes) 0.4 144.7 145.1 100,000 Reinforcing Steel (tonnes) Structural Steel (tonnes) 1.1 131.2 132.3 41,000 Structural Steel (tonnes) Masonary, Brickwork (m2) 0.0 69.3 69.3 694,000 Masonary, Brickwork (m2) Plasterboard (m2) 0.0 194.7 194.7 9,734,000 Plasterboard (m2) Floor Coverings (m2) 0.0 165.6 165.6 2,761,000 Floor Coverings (m2) Windows/Glazing (m2) 0.0 199.6 199.6 998,000 Windows/Glazing (m2) Painting (m2) 0.0 109.3 109.3 10,927,000 Painting (m2) Plumbing & Drainage ($1000 0.0 248.2 248.2 256,000 Plumbing & Drainage ($1000 Units) Units) Electrical ($1000 Units) 0.0 157.0 157.0 164,800 Electrical ($1000 Units) Mechanical ($1000 Units) 0.0 179.6 179.6 180,900 Mechanical ($1000 Units) Lifts & Escalators Per Item 0.0 132.2 132.2 1,110 Lifts & Escalators Per Item Fill (m3) 0.0 14.8 14.8 591,000 Fill (m3) Basecourse/Ballast (m3) 0.0 24.6 24.6 820,000 Basecourse/Ballast (m3) Paving (m2) 0.0 31.5 31.5 158,000 Paving (m2) Plant Plant Bulldozers 7.9 4.5 12.4 67,000 Bulldozers Cranes 4.3 131.8 136.1 1,925,000 Cranes Trucks 86.1 268.3 354.4 7,090,000 Trucks Graders 0.6 11.3 11.9 149,000 Graders Excavators 37.4 71.1 108.5 1,441,000 Excavators Rollers/Pavers 23.5 23.5 235,000 Rollers/Pavers Motorscrapers 0.9 0.1 1.0 5,000 Motorscrapers Loaders 3.1 0.6 3.7 34,000 Loaders Misc Small Tools 53.2 481.4 534.6 53,459,000 Misc Small Tools Labour Labour A Management 54.5 2.2 34.9 91.6 765,000 A Management B Design & Contract 298.9 26.2 361.4 686.5 7,631,000 B Design & Contract Administration Administration C Trades 112.8 52.5 1,017.3 1,182.6 39,423,000 C Trades D Service Workers 88.5 24.5 334.5 447.5 17,900,000 D Service Workers E Semi-qualified & Plant 31.7 88.41,027.1 1,147.2 45,891,000 E Semi-qualified & Plant Operators Operators F Unqualified Labour 4.0 99.8 446.5 550.3 25,012,000 F Unqualified Labour TOTALS 590.4 490.7 6,644.3 7,725.3

119 Wellington After the Quake eration is forthcoming and has enabled the region to progress its thinking and preparedness for earthquake. The support of each and every one of these organisations is gratefully acknowledged.

Colleagues in Kingston Morrison assisted with research and spreadsheet coding and development, notably Ian MacPherson and Adrian Osborne.

References Andrews, L A and others. 1993. Damage ratios and insurance aspects for services. Report of Project Group 2. Wellington Earthquake Lifelines Group 1993 Report, Wellington Regional Council, Novem- ber.

Applied Technology Council. 1985. Earthquake damage evaluation data for California - ATC13. Applied Technology Council, Redwood City, California.

Centre for Advanced Engineering. 1991. Lifelines in Earthquakes - Wellington Case Study. Project Summary and Project Report. Christchurch: Univer- sity of Canterbury.

Dowrick, D J. 1990. Study of potential losses to the EQC in large earthquakes in central New Zealand. Report to EQC.

Dowrick, D J. 1991. Study of potential losses to the EQC from damage to housing in large earthquakes in central New Zealand. Report to EQC.

Dowrick, D J. 1992. Potential loss estimates for the EQC derived using different attenuation models for Mercalli intensity. Report to EQC.

Holmes Consulting Group/DSIR. 1991. Study of potential losses to uninsured property in a large earthquake in central New Zealand. Report to EQC.

Kingston Morrison Ltd. 1993 and 1994. Various reports for clients with assets in the Wellington region.

Marsh & McLennan Ltd. 1991. Review of the Earthquake and War Damage Commission. Report to New Zealand Treasury.

Rawlinson & Co. 1994. New Zealand Construction Handbook. 1994 edition. Auckland: Rawlinson and Co.

120 Tony Lanigan

Physical reconstruction: Availability of material, labour and plant from within New Zealand and the role of the private sector

Tony Lanigan

Management and Technology Consultant, A G Lanigan & Associates Limited, Auckland

This paper compares the quantum of materials, plant and labour required for reconstruction after a major earthquake in Wellington, with known economic outputs of the construction industry and recent building industry statistics.

The availability of materials, labour and plant from within New Zealand and the involvement of the private sector in providing these resources for physical reconstruction is examined using an assumed reconstruction period of four years.

Some of the literature concerning notable recent earthquakes at Edgecumbe (1987) and Newcastle, Australia (1989) is reviewed and lessons concerning the involvement of private sector resources during the recovery (reconstruction) phase are noted.

It is concluded that the reconstruction would place a manageable demand on material, plant and labour resources from within New Zealand. It is recommended that the private sector takes a key role in planning for the disaster recovery phase of some future major earthquake event in Wellington.

Introduction public domain information on sales and on the informed comment of key industry players. Avail- Estimates of the resources required for reinstatement ability of labour is based on latest census informa- of Wellington have been prepared by Hopkins tion. (1995) and are the subject of another paper presented at this conference. Attempts to define latent capacity of materials and plant supply have met with mixed success, but they The Civil Defence Review Panel Report (1992) are presented here in an attempt to gain a more describes the emergency continuum as consisting of accurate view of availability. In most instances, the four phases: opinions of informed industry representatives have •a mitigation phase, which involves attempts to been relied upon. prevent an emergency from arising or to reduce its effects if it does occur; The Edgecumbe earthquake and the Newcastle earthquake provide good opportunities for learning •a preparedness phase, in which plans are made to about the role of private sector organisations in deal with an emergency; reconstruction. The Newcastle event provides some •a response phase, during which measures are clear insights into how the private and public sectors taken to deal with the immediate effects of the might cooperate efficiently to channel private sector emergency itself; and resources into reconstruction. •a recovery phase, in which steps are taken to Conclusions based on the research carried out during address the problems arising from an emergency. the preparation of this paper are formulated in the The difficulty in treating these phases as a simple hope that the private sector might recognise the clockwise progression is the fact that they usually opportunities to become involved with public sector overlap. However, this paper confines itself prima- organisations in planning for a major recovery phase rily to the recovery phase. effort in a pre-impact environment.

An analysis is made of the current consumption of materials and use of plant based, where possible, on

121 Wellington After the Quake

Assessment of resources required obtain facts and figures in a form that suits a consistent tabular form of presentation. In a paper presented at this conference, Hopkins (1995) explained the methodology by which dollar When discussing availability of specific materials estimates of earthquake damage for various classes and plant resources, it has been decided to present, of assets have been established. Broad-brush where possible, the demand for each of the resources assessments of damage have been made on the basis in a ratio form, which is calculated from demand that Wellington would be put back the way it was, over the National Annual Sales of that resource. i.e. there has been no attempt at this stage to take account of factors such as obsolescence, under- In cases where it has been possible to ascertain the utilisation of facilities or the possible reduction in latent production/supply capacity for a particular demand for facilities in Wellington following the resource, a further ratio has been calculated, being earthquake. the demand for each of the resources divided by the total of the national annual sales plus the latent The subsequent split of this damage into dollar supply capacity for the particular resource. values for materials, plant and labour resources required for reinstatement and repair are presented in Table 1 and form the basis for comparing and The overall demand for resources discussing various issues concerning availability of An overall feel for the demand for resources follow- these resources. Quantities of each of the resources ing a major earthquake can be obtained in the were established by dividing their dollar amounts by following ways: firstly, to view the demand within appropriate unit rates. the context of annual values of total buildings and dwellings put in place, and secondly, to view the Reconstruction period total demand of $7,725 million within the context of the outputs of the national economy. For the purposes of comparison of demand and supply, a reconstruction period of four years has Annual building industry statistics been chosen. This period fits that used previously by Kingston Morrison Limited (1994) and is considered Figure 1 shows the annual value of work put in place a reasonable choice based on recent evidence from for New Zealand and for Wellington for total overseas. buildings and total dwellings. All figures include alterations and additions. Superimposed on Figure 1 Availability of resources are three comparative graphs. It is assumed that cumulative expenditure on reconstruction follows a General simple “S” curve throughout the four-year construction period: This paper considers the availability of resources within the context of existing manufacturing and •assumed total expenditure on reconstruction of supply channels that operate within the building infrastructure and buildings — the average industry in New Zealand. There is no attempt to annual demand over the four-year reconstruction assess what new manufacturing and supply arrange- period for infrastructure and all buildings ments might be more appropriate after the earth- represents about 40 percent of the annual spend quake. This paper does not specifically deal with on all buildings during the period 1988-1991; how the existing or new supply chains might work •assumed expenditure on commercial and indus- following the earthquake. Logistical issues are the trial reconstruction — the average annual subject of another paper to be presented at the demand over the four-year reconstruction period conference (Christianson, 1995). for commercial and industrial buildings represents about 25 percent of the annual spend on all In examining availability of resources, it has become buildings during the period 1988-1991; obvious that not all the information required is in the public domain. It has been necessary, in some •assumed expenditure on residential construction instances, to obtain information on a confidential — it may be concluded that the average annual basis from key personnel in companies and organisa- demand over the four-year period for residential tions that participate in the New Zealand building reconstruction is about 30 percent greater than industry. It has not been possible in all cases to the annual spend on residential building activity

122 Tony Lanigan

Table 1: Summary of design, demolition, and construction costs and quantities (including construction costs, planning, design, etc. and demolition)

Dollars (millions) Quantities Design Demolition Construction Total Amounts Units Materials Concrete 1.1 283.0 284.1 12,895,000 cm Timber 1.1 344.7 345.8 345,000 cm Reinforcing Steel 0.4 144.7 145.1 100,000 tonnes Structural Steel 1.1 131.2 132.3 41,000 tonnes Masonary, Brickwork 69.3 69.3 694,000 sq.m Plasterboard 194.7 194.7 9,734,000 sq.m Floor Coverings 165.6 165.6 2,761,000 sq.m Windows/Glazing 199.6 199.6 998,000 sq.m Painting 109.3 109.3 10,927,000 sq.m Plumbing & Drainage 248.2 248.2 248,200,000 lump sum Electrical 157.0 157.0 157,000,000 lump sum Mechanical 179.6 179.6 179,600,000 lump sum Lifts & Escalators 132.2 132.2 132,200,000 lump sum Fill 14.8 14.8 591,000 cm Basecourse/Ballast 24.6 24.6 820,000 cm Pavings 31.5 31.5 158,000 sq.m Sub-total: Materials 0.0 3.6 2,430.0 2,433.6

Plant Bulldozers 7.9 4.5 12.4 67,000 hours Cranes 4.3 131.8 136.1 1,925,000 hours Trucks 86.1 268.3 354.4 7,090,000 hours Graders 0.6 11.3 11.9 149,000 hours Excavators 37.4 71.1 108.5 1,441,000 hours Rollers/Pavers 23.5 23.5 235,000 hours Motorscrapers 0.9 0.1 1.0 5,000 hours Loaders 3.1 0.6 3.7 34,000 hours Misc Small Tools 53.2 481.4 534.6 53,459,000 hours Sub-total: Plant 0.0 193.5 992.6 1,186.1

Labour Management 54.5 2.2 34.9 91.6 765,000 hours Design & Contract Admin. 298.9 26.2 361.4 686.5 7,631,000 hours Trades 112.8 52.5 1,017.3 1,182.6 39,423,000 hours Service Workers 88.5 24.5 334.5 447.5 17,900,000 hours Semi-qualified & Plant 31.7 88.4 1,027.1 1,147.2 45,891,000 hours Operators Unqualified Labour 4.0 99.8 446.5 550.3 25,012,000 hours Sub-total: Labour 590.4 293.6 3,221.7 4,105.7

GRAND TOTALS 590.4 490.7 6,644.3 7,725.4

in Wellington and about 20 percent of the buildings and infrastructural works, was $10,927 national spend on residential building activity, million. both for the period 1988-1991. The table records the direct and indirect outputs of The National Economy the industries that contribute to the construction industry. The total contribution of the construction Table 2 has its origins in work carried out by industry itself to the final use or direct output of Statistics New Zealand on the Inter-Industry Study $10,927 million was $13,840 million, the difference of the New Zealand Economy for 1990-1991. For being the amount contributed (i.e. the indirect that period, the total “final use” or direct output of output) to the other industries, in order for them to the New Zealand construction industry, including produce their contribution.

123 Wellington After the Quake

5000 4500 NZ Total - Dwellings 4000 NZ Total - All Buildings

) 3500 Wellington Total - Dwellings ons 3000 Wellington Total - All Buildings illi m

( Assumed Commercial and 2500 Industrial Reconstruction

ars ($4596 million) ll

o 2000

D Assumed Residential

1500 Reconstruction ($1924

NZ million) 1000 Assumed Total Expenditure on Reconstruction ($7725 500 million) 0 988 990 986 989 987 985 992 993 994 1991 1 1 1 1 1 1 1 1 1

Figure 1: Annual value of total buildings and dwellings put in place NZ$ (millions) for New Zealand and Wellington, plus assumed total expenditure for commercial and industrial reconstruction, assumed residential reconstruction and assumed total expenditure on reconstruction

The average annual spend on earthquake reconstruc- Cement supply is not seen as a difficulty. In the tion over the assumed four-year period ($1,931 longer term, there are options for repair of storage million per annum) represents approximately 15 silos in Wellington, should they be damaged. percent of the total output of the national construc- Supplies could be obtained through the ports of tion industry for the 1990-1991 period. Taranaki and Napier. Alternatively, should wharves be unusable, it may be feasible to use ship storage or Materials to unload tanker ships via temporary buoyed lines to on-shore storage facilities. Table 3 summarises the total and average demand over the four-year reconstruction period for several In terms of truck fleet resources, the current market bulk building materials and key sub-contract areas. in New Zealand is stretching resources — approxi- These demand figures are compared with the mately 50 trucks are on the road in the Wellington national annual sales and, where possible, the region. In the event of the earthquake, it is likely that corresponding national potential supply capacity. the current fleet could be relatively easily doubled by moving trucks from areas of low demand. Concrete Precast/prestressed facilities in the Wellington In the case of concrete supply, there are several region are estimated to have sufficient capacity for issues that need to be addressed — cement supply, the likely demand of components needed for recon- aggregate supply, readymix production capacity and struction. fleet distribution capacity. The ratios presented in Table 3 for national capacities are interesting in terms of understanding the over-capacity of the Masonry/Brickwork readymix industry, but are not so relevant to the Table 3 indicates that there is ample national and Wellington region because of the perishable nature regional capacity to satisfy the demand for masonry of the material. during the reconstruction process.

The Wellington regional figures are more helpful. Timber The current annual regional sales for readymix concrete are in the order of 175,000 cubic metres. It The 1994 figure for apparent consumption of sawn is estimated that the Wellington regional potential timber is 1,919,000 cubic metres; when exports are supply capacity is in the order of at least 700,000 included, the 1994 production figure is 2,816,000 cubic metres per annum. This would easily meet the cubic metres. demands created during reconstruction.Aggregate resources are dealt with later in this paper.

124 Tony Lanigan

Table 2: Inter-industry study of New Zealand economy 1990-1991 construction industry requirements (direct and indirect), NZ$ (millions)

Total Output for Construction Industry $10,927 Total Output INDUSTRY GROUPS Requirements Per Industry PG1 Agriculture $114 PG2 Fishing and Hunting $7 PG3 Forestry & Logging $165 PG4 Mining & Quarrying $269 PG5 Food, Beverages & Tobacco $135 PG6 Textiles, Apparel & Leather $103 PG7 Wood & Wood Products $930 PG8 Paper, Products & Printing $464 PG9 Chemicals, Petrol, Rubber, etc $879 PG10 Non-Metallic Mineral Products $964 PG11 Basic Metals $219 PG12 Fabricated Metal Products $1,540 PG13 Other Manufacturing $6 PG14 Electricity, Gas & Water $327 PG15 Construction $13,840 PG16 Trade Restaurants & Hotels $1,644 PG17 Transport & Storage $488 PG18 Communication $307 PG19 Finance, Insurance, Real Estate and Business Services $2,325 PG20 Ownership of - Owner Occupied Dwellings $0 PG21 Community Social and Personal Services $212 PG22 Central Government Services $42 PG23 Local Government Services $255 PG24 Private Non-Profit Services for Households $11 PG25 Household Domestic Services $0

Building and ancillary building services — Includes construction, alteration, renovation, repair and maintenance of buildings. Also included are ancillary building and construction services, such as brick and block laying, carpentry, painting, plastering, glazing, roofing, electrical and plumbing work, installation of heating, air conditioning, floor covering and insulation and other building and construction services. Owner builders — Includes the construction of any building by a person (or enterprise) who undertakes construction work for their own use whether or not the owner physically does any building work. The main focus is on the building activity of households. Other construction — Construction and project management for work other than building. Includes work on structures such as dams, roads, pipelines, tunnels, bridges, power transmission lines and flood and drainage facilities.

Approximately 700,000 cubic metres is used for 113,000 tonnes, of which approximately 15 percent structural grades. The industry has a reasonably high was sold into the Wellington region. level of latent production capacity, which could be brought on stream to meet short-term demands The normal capacity for the manufacture of reinforc- created by the reconstruction effort. ing bars in New Zealand is at least 250,000 tonnes per annum. The demand created by the earthquake Reinforcing steel reconstruction effort could be met with relative ease. In 1994, total domestic sales of steel destined for Industry sources indicate that there could be prob- reinforcing bar, mesh and fasteners amounted to lems in providing fabricating facilities at short

125 Wellington After the Quake

Table 3: Total demand and average annual demand over assumed four-year reconstruction period for materials versus national annual sales and national potential supply capacity

Average National RATIO RATIO RATIO RATIO Annual Total National Latent Potential = = = = Materials Units Demand Earthquake Annual Sales Supply Supply Total Demand Average Demand Total Demand Total Demand Over 4 Year Demand (Consumption) Capacity Capacity National National National Construction National Annual Annual Sales Potential Potential Period Sales Supply Supply Capacity Capacity Concrete cm 1,895,000 473,750 1,730,400 4,269,600 6,000,000 110% 27% 32% 8% Timber cm 345,000 86,250 1,919,000 1,581,000 3,500,000 18% 4% 10% 2% Reinforcing Steel tonnes 100,000 25,000 113,000 137,000 250,000 88% 22% 40% 10% Structural Steel tonnes 41,000 10,250 25,000 25,000 50,000 164% 41% 82% 21% Masonary Brickwork sq.m 694,000 173,500 2,848,338 13,151,662 16,000,000 24% 6% 4% 1% Plasterboard sq.m 9,734,000 2,433,500

Services

Plumbing & Drainage sum 476,000,000 119,000,000 245,000,000 194% 49% Electrical sum 396,000,000 99,000,000 280,000,000 141% 35% Mechanical sum 396,000,000 99,000,000 250,000,000 158% 40% Lifts & Escalators sum 317,000,000 79,250,000 35,000,000 906% 226%

Windows/Glazing sum 199,600,000 49,900,000 177,700,000 112% 28%

Fill cm 591,000 147,750 2,271,000 2,729,000 5,000,000 26% 7% 12% 3% Basecourse/ballast cm 820,000 205,000 18,780,000 21,220,000 40,000,000 4% 1% 2% 1% Paving (hot mix) tonnes 300,000 75,000 580,000 4,420,000 5,000,000 52% 13% 6% 2% notice. Investigations are under way to ascertain the importing of installation skills from offshore and the viability of mobile fabrication plants to address the introduction of a rapid training programme for local current range of projects in New Zealand. These labour. could be redirected to the Wellington region in an emergency. Windows/Glazing Current annual sales under the heading of windows/ Structural steel glazing have been calculated by applying the same Structural steel is imported from Australia, Japan trade breakdown percentages for residential and and Korea, where producers hold large volumes of commercial construction as used by Hopkins (1995) standard sizes that can be readily accessed to meet to the annual work put in place statistics published urgent requirements. The required volume could be by Statistics New Zealand. This calculation sets the delivered to Wellington within a three to four month current annual consumption for these materials at timeframe. $177,700,000, which compares well with data provided from a key glass industry participant. Of Plasterboard total sales, approximately 10 percent goes into the Wellington region. The majority of plasterboard used in New Zealand is currently manufactured at sites in Auckland and Since the closure of the Whangarei manufacturing Christchurch. A plant in Wellington has been facility some years ago, all building glass has been mothballed. imported. It is estimated that basic replacement stock could be available in Wellington within four In the event of an earthquake, the increased demand weeks of the disaster. The ability of overseas glass for plasterboard could be met by operating existing manufacturers to supply the amount of glass re- plants on a greater number of shifts. Industry sources quired is not considered a problem, although some confirm that short-term problems could be associ- of the high-performance glasses require lead times ated with the supply of skilled labour to fix and stop of up to 12 weeks. Supply from existing stocks plasterboard. Current strong residential and commer- elsewhere within New Zealand and from orders cial construction is fully utilising the capabilities of already in transit would be available in the short existing tradespeople throughout New Zealand. The term. Wellington earthquake scenario would call for

126 Tony Lanigan

Apart from specialised processing, such as toughen- current production, diverting products scheduled for ing, laminating and double glazing, all of which can export or by supplementing with imports. be done elsewhere within New Zealand (and Aus- tralia), the only facilities necessary could all be Electrical. The size of the current electrical market transferred relatively easily and quickly to Welling- is estimated to be in the order of $280 million. ton from existing operations throughout New Building and power cables and external telephone Zealand. cables have a market size of approximately $130 million. The majority of building and power cables Industry sources estimate that there are approxi- are manufactured in New Zealand. Industry sources mately 120 glaziers and glass workers in the Wel- consider that the current production is working at 60 lington region. A further 50 or so operate within the to 70 percent of full capacity. This excess capacity, immediate surrounding areas, with perhaps the same coupled with existing import channels, could supply number again available from temporary transfers the resources needed for rebuilding after the earth- from further afield. There is very limited scope for quake. the use of unskilled labour. The building industry related switchgear market is Building services estimated to be in the $50 to $60 million range. The current production capability could be relatively In Table 3, the items under the services heading easily doubled over a six-month period. The supply have been presented in dollar terms and, for the of imported componentry is not a significant issue. purposes of comparison, the earthquake demand and annual consumption figures include materials, plant Mechanical. This item covers fire services and and labour. HVAC. The size of the current mechanical market is estimated to be in the order of $250 million. Ramp- Based on further analysis of the spreadsheets ing up to meet the demands of rebuilding after the developed by Hopkins (1995), the total demand for earthquake are considered to be well within the services has been estimated to be $1,585,000. The capabilities of the industry. percentages applied to this total to assess the demand for plumbing/drainage, electrical, mechanical, Lifts and escalators. The current size of this industry and lifts are 30, 25, 25 and 20 percent respectively. is approximately $35 million. Industry sources Based on advice from various industry sources and advise that the local industry is working at about 80 analysis of the annual statistics on work put in place percent of capacity and that the demands resulting published by Statistics New Zealand for dwellings from the earthquake would cause a real shortage of and other buildings, the following market sizes have skilled resources to cope with initial repairs and been established: plumbing/drainage, $245 million; subsequently with rebuilding. electrical, $280 million; mechanical, $250 million; and lifts/escalators, $35 million. The view is that the larger international companies operating in New Zealand would have to call in Plumbing/drainage. The size of the current drainage experienced personnel from offshore, but that local market is estimated to be in the order of $95 million. and overseas manufacturers could keep up with the This includes cast-iron streetware, valves and level of componentry required. fittings, pipes manufactured from spiral welded steel, ductile iron, concrete and plastics. Industry Hardfill sources indicate that current production facilities can supply a potential market size of $145 million, The ratios in Table 3 are not very helpful in under- which implies that the demands for these products standing specifics related to supply of aggregates in created by the reconstruction effort could be met the Wellington region. fairly easily. The NZ Annual Mining Review indicates that, in The current size of the plumbing market is estimated 1992, the national total production of rock for to be in the order of $150 million, of which piping harbour works and filling, etc. was 2,271,000 cubic makes up about $30 million. Industry sources metres, with 480,000 cubic metres being produced indicate that the demand for plumbing componentry, within the Palmerston North inspectorate — which including piping, can easily be met by ramping up includes the Wellington region. Almost 30 percent of the inspectorate’s total aggregate production is

127 Wellington After the Quake within the Wellington region, with approximately Plant 140,000 cubic metres of hardfill produced. Introduction Industry sources indicate that the output of existing Table 4 summarises the total demand and the plants could be easily doubled if there was sufficient average demand over the four-year reconstruction demand. This would adequately meet the quantities period for key plant items. These demand figures are required for earthquake reconstruction. compared with the national listed capacity and, where possible, the corresponding national potential Basecourse/Ballast capacity. The NZ Annual Mining Review indicates that the Key resource documents have been the contracting national total production of sand, rock and gravel for industry’s directory, Contractor (1994), and the roads and ballast production was 18,780,000 cubic Power Crane Association Crane Register (1994- metres in 1992, with 3,152,000 cubic metres being 1995). In calculating the listed capacity (in hours) of produced within the Palmerston North inspectorate, various plant items, it has been assumed that, on which includes the Wellington region. average, plant items work for 1500 hours per year. Using a similar calculation as for hardfill, the The Contractors’ Federation estimates that its plant basecourse/ballast figure for Wellington region is register in Contractor (1994), excluding cranes, estimated as 945,000 cubic metres. Industry sources represents about 50 percent of the plant in New indicate that the output of existing plants could be Zealand available for contracting purposes. The doubled if there was sufficient demand. This would national potential capacity for all plant has been adequately meet the quantities required for earth- calculated by doubling the numbers of listed plant to quake reconstruction. allow for plant held by non-Federation members and multiplying by 1500 hours. This latter figure has Paving (hotmix) then been increased by 20 percent to allow for As for readymix concrete, the ratios presented in increased working hours, from 1500 to 1800 hours Table 3 for national capacities of hotmix paving are per year. interesting in terms of understanding the over- capacity of the hotmix industry, but are not so In the case of cranes, the Power Crane Association relevant to the Wellington region because of the estimates that its published figures for plant repre- perishable nature of the material. sent about 80 percent of the crane tonnage capacity available for work in New Zealand. The national The national annual sales of hotmix range from potential capacity for cranes has been calculated by 580,000 to 600,000 tonnes. The Wellington region dividing the numbers of listed plant by 80 percent sales are in the order of 80,000 to 100,000 tonnes and multiplying by 1500 hours. This latter figure has per annum. Current plants in the Wellington region then been increased by 20 percent to allow for are capable of producing up to 1 million tonnes per increased working hours, from 1500 to 1800 hours annum, which would easily meet the requirements per year. for earthquake reconstruction. In the event that permanent plants are damaged, short-term supply Bulldozers, graders, excavators, rollers/pavers, could be supplemented by bringing in mobile plants. motor scrapers, loaders Currently, there are three that would be suitable for Table 4 indicates that the demand for these plant such purposes. items is well within the capacity of the existing industry. There are no definitive figures published Conclusion on availability of plant in the Wellington region, but In general, it can be deduced that there is sufficient industry sources indicate that approximately two- capacity within New Zealand to manufacture and thirds of the listed plant capacity is based in the supply the materials required for reconstruction over North Island and is relatively mobile. a period of four years. Cranes The total number of mobile cranes (truck-mounted, crawler and rough-terrain) registered by the Power

128 Tony Lanigan

Table 4: Total demand and average demand over assumed four-year reconstruction period for plant versus national listed capacity and national potential capacity

Average National RATIO RATIO RATIO RATIO Total Annual National Latent Potential = = = Plant Units = Demand Listed Capacity Earthquake Capacity Total Demand Average Demand Total Demand Total Demand Over 4 Year Demand Capacity National Listed National National Construction National Listed Capacity Potential Potential Period Capacity Capacity Capacity Bulldozers hours 67,000 16,750 216,000 302,400 518,400 31% 8% 13% 3% Cranes hours 1,925,000 481,250 534,000 133,500 667,500 360% 90% 288% 72% Trucks hours 7,090,000 1,772,500 3,600,000 18,000,000 21,600,000 39% 10% 33% 8% Graders hours 149,000 376,250 109,500 109,500 219,000 136% 34% 68% 17% Excavators hours 1,441,000 360,250 628,500 628,500 1,257,000 229% 57% 115% 29% Rollers/Pavers hours 235,000 58,750 147,000 147,000 294,000 160% 40% 80% 20% Motorscrapers hours 5,000 1,250 87,000 87,000 174,000 6% 1% 3% 1% Loaders hours 34,000 8,500 483,000 483,000 966,000 7% 2% 4% 1% Miscellanoeus sum 534,600,000 133,650,000 100,000,000 25,000,000 125,000,000 535% 134% 428% 107% plant

Crane Association is in the order of 350, with Conclusion approximately 246 located in the North Island and It is fair to conclude that there is sufficient plant 70 operating in the Lower North Island. capacity within New Zealand to meet the requirements for reconstruction over a period of four years. An initial assessment indicates that mobile crane resources would be stretched, at least initially, but industry sources advise that there is a significant, but Labour unknown, number of “truck-mounted/truck loading” An overall view of labour resources available to hydraulic cranes (Hiab, Palfinger, etc.), which would assist with reconstruction was obtained from infor- be ideal for a lot of the work expected during the mation provided by Statistics New Zealand from the reconstruction period. 1991 Census of Population and Dwellings. The raw data was provided in the form of area of usual Trucks residence and occupation, by industry, for population resident in New Zealand aged 15 years and The Road Transport Association advises that there over, gainfully employed in the full-time and part- are approximately 18,000 trucks in New Zealand time labour force. available for “hire and reward”. Of these, some 12,000 could be considered general-purpose vehi- Tables 5 and 6 list the population and occupation cles. Approximately 8000 general-purpose trucks for construction and allied industries for the whole operate in the North Island. of New Zealand and for the Wellington Regional Council area. Approximately 13 percent of the Miscellaneous plant construction industry’s labour resource is located in This item is taken to include such items as compres- the Wellington region. An estimate of latent employ- sors, compactors and the like. Sources within the ment capacity was obtained by increasing the normal construction equipment hire industry estimate that annual hours worked from 1500 to 1800 hours. the size of the current market is in the order of $100 Additional resources could be obtained from the million per annum. Approximately 10 percent of the ranks of the unemployed. The household labour market is in the Wellington region. force survey for the September 1994 quarter (Statis- It is difficult to assess the miscellaneous plant tics New Zealand) shows overall unemployment in inventory held by contractors. An informed source New Zealand at 127,300 and at 16,200 for the estimates that nationwide this may be equivalent to Wellington region. Also, labour market statistics an annual hireage figure of $25 million. One can 1992 (Statistics New Zealand) shows that, of the conclude, therefore, that reconstruction would place numbers of people listed as being unemployed, severe demands on miscellaneous plant items. Hire approximately 9 percent had worked in the building industry experts consider that this shortage could be and construction industries in their last job. satisfied over a two to three month period.

129 Wellington After the Quake

Table 5: Population and occupation by construction and allied industries for New Zealand and for population usually resident within the Wellington Regional Council Area

Construction Industries Occupation Grouping Wellington WRC total normal NZ totals NZ total normal NZ total normal Regional hours worked per hours worked per hours worked per Council year at 1500 each year at 1500 each year at 1800 each (WRC)

Management 792 1,188,000 5283 7,924,500 9,509,400 Design & contract 468 702,000 2982 4,473,000 5,367,600 administration Trades 7188 10,782,000 50,568 75,852,000 91,022,400 Service workers 771 1,156,500 6225 9,337,000 11,205,000 Semi-qualified/ 1023 1,534,500 10,890 16,335,000 19,602,000 Plant operators Unqualified labour 699 1,048,500 6555 9,832,500 11,799,000

Totals 10,941 16,411,500 82,503 123,754,500 148,505,400

Construction industries include the following divisions: 51 Building Construction 52 Construction other than buildings 53 Ancillary construction services

Table 6: Population and occupation by allied industries for New Zealand and for population usually resident within the Wellington Regional Council area

Allied Industries Occupation Grouping Wellington WRC total normal NZ totals NZ total normal NZ total normal Regional hours worked per hours worked per hours worked per Council year at 1500 each year at 1500 each year at 1800 each (WRC)

Management 1839 2,758,500 10,194 15,291,000 18,349,200 Design & contract 2136 3,204,000 12,987 19,480,500 23,376,600 administration Trades 534 801,000 4491 6,736,500 8,083,800 Service workers 3903 5,854,500 25,899 38,848,500 46,618,200 Semi-qualified/ 2844 4,266,000 24,366 36,504,000 43,804,800 Plant operators Unqualified labour 1314 1,971,000 9747 14,620,500 17,544,600

Totals 12,570 18,855,000 87,654 131,481,000 157,777,200

Allied industries include the following divisions: 41 Electricity, gas & steam production 42 Water works & supply 71 Transport & Storage 72 Communication

130 Tony Lanigan

Table 7 summarises the total demand and the (recovery) plan is the acceptance of the fact average demand over the four-year reconstruction that there is a probability of experiencing a period for key labour groupings. These demand significant disaster. figures are compared with the corresponding national employment levels and the national poten- Proceedings of a seminar held by the EQC for loss tial employment levels. adjusters (EQC, 1987) describes the commitment and ability of the insurance industry to handle — on Conclusions site — a high number of claims in a short space of time. In a national sense, it would appear that there is sufficient labour to meet the demands of earthquake Robinson (1988) notes the experience of visiting reconstruction. Adding the input of “experienced” householders whose frustration had reached break- unemployed people, i.e. a further (9% x 127,300 x ing point following what appeared to be endless 1800 =) 20,622,600 hours, plus recruits from allied visits by inspection teams but no real action in industries, can only improve the situation. repairing the physical damage. Builders also complained of wasting considerable time quoting on jobs Combining the various ratios given in Table 6 with rather than constructively working on repair and feedback from various industry sources surveyed restoration and of the other real problem that they during the preparation of this paper confirms that often had to quote on works without having a clear there will be few problems in attracting the requisite understanding of the works required. labour force to Wellington. The major problem is likely to be associated with providing suitable The Newcastle earthquake (28 December 1989) has accommodation. produced much reflection on the role of the private sector in the recovery phase. Rynn (1991) and Rynn Organisational issues affecting the et al. (1992) have provided extensive coverage of the private sector events surrounding the earthquake and the lessons that can be learned. Beyond the statistics on availability of materials, plant and labour lie the real issues of how the There is a recurring theme that relates to the need to necessary resources will be deployed and managed. identify damage and/or defects correctly and determine the adequacy of the scope of works before In this paper, the emphasis has been on examining repairs are commenced. There is also a need to have the availability of resources primarily for the quality assurance procedures in place. Henri (1991) recovery phase, but there is no intention of under- summarised some of the problems from an insurance playing the role that the private sector must play in perspective, but related to the building industry, as the other phases of the emergency continuum. follows:

Hodge (1989) describes the on-site commitment of ... the massive scale of damage in Newcastle professional advisers such as engineers, loss adjust- produced the not unexpected problems of ers, contractors, materials suppliers and the like that supply and demand of services and materials. enabled rapid commencement of reconstruction In hindsight we can clearly see, that apart work at the Bay of Plenty mill operated by Tasman from temporary repairs which may have Pulp and Paper following the 1987 Edgecumbe allowed occupation, permanent repairs ought earthquake. The author also describes the flexible not have been undertaken for at least three organisational structures and project management months. It would seem that much of the early procedures (typical of large-scale industrial projects) repair work was a waste of time and money that were put in place to manage operational and as much of this work had to be redone. engineering support personnel from the mill, However, there was great pressure being external specialist advisers, construction organisa- exerted by Local Authorities, the community tions, territorial authorities, insurance organisations, in general and of course the building trade, machinery suppliers, etc. Hodge also notes that: to get on with the job. The earthquake damage represented a bonanza for the ... no effective plan can be formulated building trade in Newcastle and surrounding without dedication and commitment. The areas. Tradespeople of all disciplines and major difficulty in conceiving a disaster many others who promoted themselves as

131 Wellington After the Quake

Table 7: Total demand and average demand over assumed four-year reconstruction period for labour versus national employment level and national potential employment level

Average National RATIO RATIO RATIO RATIO Total Annual National Latent Potential = = = = Labour Units Earthquake Demand Employment Employment Employment Total Demand Average Demand Total Demand Total Demand Over 4 Year Demand Level Capacity Capacity National National National National Construction Employment Employment Potential Potential Period Level Level Employment Employment Level Level

Management hours 765,000 191,250 7,924,500 1,584,900 9,509,400 10% 2% 8% 2% Design & Contract hours 7,631,000 1,907,750 4,473,000 894,600 5,367,600 171% 43% 142% 36% Administration Trades hours 39,423,000 9,855,750 75,852,000 15,170,400 91,022,400 52% 13% 43% 11% Service Workers hours 17,900,000 4,475,000 9,337,500 1,867,500 11,205,000 192% 48% 160% 40% Semi-qulaified & hours 45,891,000 11,472,750 16,335,000 3,267,000 19,602,000 281% 70% 234% 59% Plant Operators Unqualified hours 25,012,000 6,253,000 9,832,500 1,966,500 11,799,000 254% 64% 212% 53% Labour

Overall Totals 136,622,000 34,155,500 123,754,500 24,750,900 148,505,400 110% 28% 92% 23%

qualified and experienced tradespeople, but The proceedings of the Wellington Earthquake were not, flooded into Newcastle in the days Lifelines Group (1994) attest to the commitment of and weeks following the earthquake. Prop- various territorial authorities and organisations erty owners, fearing they would find them- responsible for utilities to work together to ensure a selves last on the queue, scrambled to get coordinated approach to response planning for tradespeople to quote and undertake repairs. lifeline utilities and the impacts of interdependence The seeds of greed were sown at this time. of one lifeline on another on the response process. It The insurance industry staggered under the is now commonplace for lifeline organisations to weight of quotes that were totally unrealistic, have in place registers of contractors, mutual aid unprofessional and completely objectionable. agreements, registers of materials suppliers, registers of emergency stock levels for materials and registers Fuller (1991) describes the central role established of professional advisers. by the Master Builders Association in a wide range of activities — coordinating volunteer labour, setting In a broader sense, there is an awareness by busi- of market rates to restrict opportunism, matching of nesses to devote resources to business interruption client needs with builder’s abilities, vetting of and continuity planning as evidenced by the number registered builders and sub-contractors, coordinating of seminars being promoted on the topic. There is a the region’s building resources so they could be tendency, however, for such gatherings to concern directed quickly and effectively to the massive themselves with information technology and related rebuilding task and maintaining extensive liaison business systems issues rather than considering the with emergency services, territorial authorities, physical viability or otherwise of continuing busi- labour organisations and professional bodies. ness in a particular locality.

In the event of any large earthquake, decisions will The insurance industry has produced The Insurance be required on the standard of repair for damaged Emergency Plan (1993), which relies on a national buildings. Should repair be to current codes, to a network of standing committees ready to respond pre-existing level or something in between? The and apply it should an emergency arise. The plan balance must hinge on the two questions of continu- encourages a commitment to pre-emergency plan- ing safety and economic reality. Such questions will ning and requires at least annual liaison between apply to all sections of the infrastructure as well. civil defence, emergency services, territorial authori- The processes for deciding on how such answers ties, trade associations, etc. The aim is to inform will be arrived at between the asset owners, insurers these various bodies about the role of loss adjusters and territorial authorities should desirably be in an emergency and to gain information from the addressed in a pre-impact environment. various bodies on important issues, such as what restrictions are likely to apply in differing types of disasters, the size and distribution of skilled labour

132 Tony Lanigan resources and the local availability, supply and within New Zealand. The major associated sourcing of materials. problem will concern the accommodation requirements of the additional labour resources. Britton (1994) provides a case study of emergency • The New Zealand construction industry has a management and lifeline coordination for Welling- proven track record in the management and ton city. The author notes in regard to the recovery supply of resources to satisfy the demands of phase that Wellington City’s Disaster Recovery Plan major projects. The industry attracts personnel is currently being developed and that in consultation who have the necessary creativity, flexibility and with relevant parties throughout the city, the plan mobility to meet the special demands that establishes a coordinated framework within which reconstruction after a major earthquake will mechanisms that are essential for prompt and create. appropriate physical reconstruction and social rehabilitation will take place. There has not been • There is a demonstrable commitment by profes- widespread involvement of the private sector with sional groups, construction organisations and this planning initiative. material suppliers to provide on-site resources from throughout New Zealand to deal with the The Civil Defence Review Panel Report (1992) response phase and to carry on to the recovery notes that the results of the State-Owned Enterprise phase as may be required. Act 1986 and the Local Government Amendment • There are significant inter- and intra-organisa- Act (No. 2) 1989, which makes provision for Local tional issues that arise during the recovery phase. Authority Trading Enterprises (LATEs), have made The organisations are diverse and include civil a considerable difference to the location, volume defence, emergency services, territorial authori- and, availability of equipment and services tradition- ties, asset owners, insurers, loss adjusters, ally available to civil defence through central or engineers, architects, quantity surveyors, con- local government organisations. Despite these struction organisations, etc. Apparent reluctance changes, it is asserted by the Contractors Federation by the private sector to become involved with (Tritt, 1994) that there has never been a civil defence planning for response and recovery may not be emergency in New Zealand when contractors’ plant as widespread as earlier believed. Increasingly, has not been readily and willingly made available. private enterprise does take business interruption The report also makes some interesting points about planning seriously. the planning requirements of an expanded private • The work of the Wellington Earthquake Lifelines sector (including the SOEs and LATEs) within the Group, which to date has focused primarily on civil defence context. It is noted that all organisa- pre-recovery phase activities, serves as a useful tions should plan for the civil defence needs of their template for extending planning activities to the employees or the people placed in their charge and recovery phase. The key to success in this regard secondly, in those industries that have been termed will be to involve key players from the private essential industries. Planning, while of benefit to the sector in appropriate response planning exer- participants in the industry itself, is a matter of cises, recognising that the majority of resources national concern. The following quote focuses the expended on recovery will come from and argument: through the private sector. The development of It is one thing to say that it is good business workable processes and decision support systems to plan as part of the national need, quite linking the private and public sector in a pre- another to have it do so ... there is insufficient impact environment should be a valuable tool for impetus for the private sector to perform. utilisation by key players during the recovery phase. Conclusions • The response phase planning exercise should •Assuming a reconstruction period of four years also identify appropriate organisational structures following a major earthquake in Wellington, and define key roles and responsibilities to there would be a manageable demand on avail- ensure the effective management of resources able materials, plant and labour from within New during reconstruction. Potential candidates to fill Zealand. The demand for labour will be satisfied key roles should also be identified. by redeployment of existing resources from

133 Wellington After the Quake

•Processes for determining demolition and/or the Paper prepared for the 1994 Wellington Earthquake scope of rebuilding work, priorities for rebuild- Lifelines Group Workshop on “Lifelines in Welling- ing and for agreeing on the technical standards ton: How Well Planned Is Our Response to Earth- for rebuilding should be addressed now. This quakes?”. would avoid much of the need for unnecessary rework that appears as a feature of both the Christianson, J. 1995. “The logistics of importing Edgecumbe and Newcastle earthquakes. materials to the Wellington region, housing the workforce and construction bases.” Paper presented • It is in the national interest that the recovery at EQC Conference, Wellington, 27-29 March 1995. phase should be executed as efficiently and in as short a time as possible. The recruitment and Civil Defence Review Panel. 1992. Report of the training of the necessary labour resources and the Civil Defence Review Panel. Wellington: Depart- management of deployment of these resources ment of Internal Affairs. over a short period of time calls for the skills of organisations that have had experience with Contractor. 1994. The 1994 Contracting Industry large-scale project management in New Zealand. Directory. Wellington: The New Zealand Contrac- These organisations, either acting alone or in a tors’ Federation. consortium, could provide the necessary interface between asset owners and/or their insurers Earthquake Commission. 1987. Proceedings of to manage the recovery phase for a large group- debriefing seminar, 21 August 1987, by Earthquake ing of assets. This would provide a level of Commission’ assessors on the eastern Bay of Plenty certainty for material supply, plant supply and earthquake (Edgecumbe). quality of performance, timing and cost. The pros and cons of this form of management Fuller, R W. 1991. “Lessons with construction contract ought to be explored as soon as practica- standards: The role of the builder — latent defects”. ble by large insurers, such as the EQC, and the Proceedings of Conference on “What we have learnt larger construction and building organisations. from the Newcastle Earthquake”, organised by the Newcastle City Council and Centre for Earthquake • It is hoped that this paper will serve as a prompt Research in Australia. University of Queensland for the private sector to cooperate fully with the continuing professional education publication. public sector in developing suitable mechanisms for expediting the recovery phase of the Welling- Henri, C D. 1991. “Believe it or not — the insurance ton earthquake, when it occurs. industry is also learning”. Proceedings of Confer- ence on “What we have learnt from the Newcastle Acknowledgements Earthquake”, organised by the Newcastle City Council and Centre for Earthquake Research in This paper was written at the request of the EQC. Australia. University of Queensland continuing The paper has been prepared with the financial professional education publication. assistance of Fletcher Challenge Limited, Building Products Sector and this support is gratefully Hodge W C. 1989. “Planning for disaster”. Bulletin acknowledged by the author. The preparation of this of the New Zealand National Society for Earthquake paper has required the input and advice from many Engineering 22 (4). individuals and companies throughout New Zealand and Australia. This cooperation is also acknowl- Hopkins D C. 1995. “Assessment of resources edged. required for reinstatement”. Paper presented at EQC Conference, Wellington, 27-29 March 1995. The views expressed in this paper are those of the author and in no way can be taken as representing Insurance Emergency National Committee. 1993. the views of Fletcher Challenge Limited or any of its The Insurance Emergency Plan. Issued by the subsidiary companies or entities. Insurance Emergency National Committee, Welling- ton. References Kingston Morrison Limited. 1994. Economic Impact Britton, N R. 1994. “Emergency management and of a Major Earthquake on Wellington. Report to lifeline coordination: Wellington City case study”. EQC, November 1994.

134 Tony Lanigan

Power Crane Association of New Zealand (Inc.). 1995. 1994-1995 Crane Register.

Robinson G W. 1988. Observations of post-earthquake period. Report to Earthquake and War Damage Commission.

Rynn, J M W (ed.). 1991. What we have learnt from the Newcastle earthquake. Proceedings of Confer- ence organised by the Newcastle City Council and Centre for Earthquake Research in Australia. University of Queensland continuing professional education publication.

Rynn, J M W, E Brennan, P R Hughes, I S Pedersen and H J Stuart. 1992. “The 1989 Newcastle, Austral- ian, earthquake: The facts and misconceptions”. Bulletin of the New Zealand National Society for Earthquake Engineering 25 (2).

Tritt, P. 1994. Executive Director, New Zealand Contractors’ Federation, Personal communication, December 1994.

Wellington Lifelines Group. 1994. Report presented at seminar, Wellington, November 1994, Section on “Interdependence and Response Planning”.

135 Wellington After the Quake

136 W R Washburn

Physical Reconstruction 2

137 Wellington After the Quake

138 W R Washburn

The role of overseas organisations in disaster recovery efforts

W R Washburn

Vice President, International Bechtel Ltd, and Operations Manager, Bechtel Asia Pacific, Hong Kong

This paper attempts to define some of the key elements in disaster recovery and to illustrate how international organisations can assist communities devastated by natural disaster.

The Bechtel group of companies has had significant first-hand experience with earthquakes during recent years and has become very familiar with catastrophic events of other types and, consequently, with the methodology of recovery efforts requiring the procurement, traffic and logistics of mobilising, effectively organising and utilising global resources.

Using the hypothetical Wellington scenario, this paper attempts to discuss how this methodology is most effectively employed during the first four weeks after a quake and in the difficult period that follows. It also employs the example of Bechtel’s experience in supporting the extinguishing of the Kuwait oil fires to illustrate how global resources can be utilised to mitigate disaster in a timely and cost-efficient manner.

Finally, the paper discusses the issues communities face in identifying overseas sources of supply and how international organisations can best supplement local resources in supporting major reconstruction efforts.

Introduction The first four weeks The Wellington after the Quake Conference offers a Four weeks after the quake, emergency response is significant opportunity for examining the challenges complete and emergency life support systems and facing cities that have been devastated by a major services have been restored (medical, water, food, earthquake. shelter, power, sanitation, etc.). The damage to major infrastructure has been assessed, an overall The Bechtel Group of companies, headquartered in reconstruction plan defined and the procurement San Francisco, California, has had significant first- process initiated; the general public is anxious to hand experience with earthquakes during recent begin long-term reconstruction activities. years. In 1989, the San Francisco Bay area was hit hard by the Loma Prieta quake, and Bechtel engi- At this point, Wellington is in that uncomfortable neers were active in emergency seismic evaluation stage between disaster and recovery. The sense of efforts. Bechtel also provided the City and County of community that was so important in bringing people Los Angeles with emergency services after the together immediately following the quake is begin- Northridge quake of 1994. Furthermore, the com- ning to fade, and a consensus on what to do next is pany has become very familiar with catastrophic noticeably absent. To ensure that recovery efforts events of other types and, consequently, with the continue in an orderly fashion after the emergency methodology of recovery efforts requiring the period is over, it is important to review the days procurement, traffic and logistics of mobilising, immediately following the quake. effectively organising and utilising global resources. Within the first week after the quake, the Quake This paper attempts to define some of the key Recovery Plan (which has been prepared, approved elements in disaster recovery and to illustrate how and rehearsed well in advance) would be refined to international organisations can assist communities address the specific emergency and reconstruction devastated by natural disaster. requirements. The plan would be reasonably comprehensive, but specifically focused on the realities of the situation. Immediate efforts would focus on

139 Wellington After the Quake three elements of the plan: activation of the procure- Keys to earthquake (disaster) recovery ment pipeline, identification and contact of out-of- For discussion purposes, assume that the above country labour sources and re-establishment of basic preliminary steps have been implemented during the infrastructure. first four weeks. Wellington now faces what could be a long and difficult road to recovery. Without the A procurement pipeline for the early identification unified support of the entire community, the poten- of equipment, materials and resources is crucial to tial for further disaster is very real. any recovery and reconstruction programme. Knowing “where it is”, “how to get it” and “how The keys to recovering from a major catastrophic long it will take to get it” is of primary importance – event are: regardless of what “it” is. This pipeline, which has been identified and periodically updated in prepara- •planning — essential for determining where the tion for an emergency, would be activated immedi- community is in the recovery process, where it is ately. going and how it is going to get there; •procurement, traffic, and logistics — “get it and In all probability, local labour sources would be get it to where it needs to be”; fully utilised for emergency and other critical reconstruction and rehabilitation work. With local • management and teamwork (organisation) — labour dedicated to these efforts, it would be neces- maximise the participation and contribution of all sary to have alternative sources identified for other resources; and important work. A current list (with pre-established • communications — timely and focused resource agreements) of reliable and skilled out-of-country utilisation. sources of construction labour would be verified and used for all major labour requirements. Having The Kuwait oil fire disaster offers a prime example skilled, affordable labour identified and agreements of how these key elements were used to accelerate in place would result in both timely response and and successfully complete the recovery effort. considerable savings. Temporary housing, food and Furthermore, the project illustrates the value of water, and support systems for foreign labourers also foresight and planning in light of an impending need to be in place (e.g. a chartered liner with disaster. emergency equipment and transport). In anticipation of the havoc Saddam Hussein would With the implementation of the recovery plan, wreak upon the Kuwait oil fields, a plan to control materials, equipment and supplies would be en route the damage was initiated in November 1990. After from all over the world. Basic infrastructure would the Gulf War, which lasted from 15 January to 28 have to be operational to support the transport of February 1991, the first Bechtel personnel arrived in materials, equipment and personnel. If the major air Kuwait on 6 March. The main objectives of the and sea ports were still not fully operational, air- Kuwait effort — the Al Awda phase — were to: strips, minimal port facilities and road networks would have to be opened. In addition, heavy equip- • extinguish the oil fires; ment transport routes into Wellington would have to •restore oil production (crucial to infrastructure be cleared. Furthermore, receiving, warehousing, and economy); laydown and storage facilities would need to be •initiate oil recovery and processing (cleanup established and communications networks (local), efforts vital to environment); and equipment and frequencies (multiple) would need to be in place. •re-establish life support facilities and services.

If you don’t have it where you need it, it won’t solve During the war, 750 wells, representing 85 percent the problem. of Kuwait’s oil producing capability, were dyna- mited or torched. Before the war, Kuwait had been By addressing the preliminary steps in the recovery producing approximately 1.5 million barrels/day of plan and effectively implementing them during the oil. The fires dealt a significant blow to the nation’s four-week emergency period, the potential of a economy, with losses of the order of $20 million per successful post-quake reconstruction and recovery day. effort dramatically increases.

140 W R Washburn

Utilising the procurement pipeline that had been The role of overseas organisations initiated in November, Bechtel was able to identify The Kuwait example is valuable in highlighting the and procure the equipment needed to fight the fires skills and capabilities that can be provided by an in an expeditious manner. At the peak of the effort, international organisation. Kuwait was a unique nearly 6000 vehicles and related equipment had been situation that will, hopefully, never occur again. brought into the country to extinguish the fires. By However, through that example it becomes easy to September 1991, 10,000 workers were on hand to see how an overseas organisation can provide assist in the effort — most of them from other support to a country, or city, that has experienced a countries. major disaster, whether natural or man-made. To house, feed and attend to a workforce of this In review, the most significant contributions an magnitude, extensive temporary facilities had to be international organisation can provide are: constructed. Again, the early identification of procurement sources was crucial to this effort, and •programme management; 200,000 tonnes of supplies were brought in to •planning and plan implementation; support the daily needs of the workforce. • centralised support services; Throughout the Al Awda phase, communication was •re-establishing the local economy and of paramount importance. After the first group of capabilities; fires were capped and the workforce had increased to accommodate 27 firefighting teams, advance • community relations; and groups of workers prepared sites in anticipation of • financial management. the firefighters. Water supply canals were dug and temporary housing installed just days ahead of the Programme management. The primary characteristic extinguishing and capping teams. Constant commu- of all disasters/catastrophic events is chaos. To nication kept all parties informed of project progress minimise the impacts of confusion, disorganisation, and transitions from site to site were almost seam- disorientation and a general lack of focus, it is less. At the beginning of the phase, one fire was essential to immediately implement a management being extinguished every 10 days. By the end of the programme. This needs to include a detailed and effort, the capping of two fires a day was not coordinated plan, a well-defined structure and a uncommon. competent, highly motivated and well-trained organisation. This can be accomplished in a variety Experts had predicted that extinguishing the fires of ways, but a professional, competent international after the war could take anywhere from three to five organisation can be an invaluable asset and can years. The most optimistic estimates gauged the make a significant contribution to an effective effort at two years. On 6 November 1991, the last of management programme, especially in the early the oil fires was capped – only eight months after the stages of emergency and recovery. first personnel arrived in Kuwait. Planning and plan implementation. The develop- The lessons from the Al Awda phase of the Kuwait ment of a detailed, well-defined emergency reaction reconstruction programme are directly applicable to and recovery plan is essential to ensure a timely and any major disaster. Success was achieved in record effective response to the quake and to minimise the time due to an effective procurement system, the adverse impacts on the community. Subsequently, utilisation of out-of-country labour resources and a the ability to coordinate and implement the plan is of systematic plan for identifying and rehabilitating paramount importance. International organisations, damaged facilities. Another critical factor in the with experience in emergency reaction and recovery Kuwait success was the maximisation of local planning and implementation can make a significant involvement; no one has a more vested interest in contribution to a disaster response and recovery returning infrastructure and other facilities to normal effort. than local residents. In the aftermath of any disaster, offshore sources of materials, equipment and labour Centralised support services. Centralising support are always supplemental to local resources. services (i.e. temporary housing, messing, water supply, communications, procurement, traffic and logistics, materials handling/storage and issuance,

141 Wellington After the Quake transportation, etc.) will contribute significantly to covering the most frequently asked questions maximising response, productivity and resource concerning the recovery programme. These are utilisation. Centralisation allows the various produc- pieces that can be distributed to the public by the tion entities/contractors to concentrate on the “things mail at shelter locations, through national, state, they do well” and, as a result, allows them to and municipal agencies, utility companies, maximise their contributions while not having to banks, and business organisations, etc. worry about support requirements. Centralisation •Brief weekly “news updates” to the outreach also allows the community to acquire the services of contacts, including those waiting for recovery an organisation that has specific experience and assistance, to communicate a regular sense of expertise in providing support services under these movement and success of the recovery effort and extreme conditions, again resulting in channelling to continually answer new questions. maximum productivity and contributions into emergency response and recovery efforts. Interna- • An overall media strategy to promote the re- tional organisations can, again, provide this experi- building efforts and communicate a sense of ence, expertise and capability. accomplishment. • Meetings, as required, with property owners to Re-establishing (assisting) the local economy and answer questions regarding rebuilding schedules capabilities. Any successful and effective recovery and status related to specific properties. programme must take into consideration the local economy and skills and capabilities of the local Financial management. The emergency response workforce. It is essential that the local community and recovery programmes are going to be extremely reestablishes both its economic viability as well as expensive, under the best of conditions, and will its self-worth as soon as possible. This can only be require professional financial experience, expertise accomplished through the revitalisation of the local and competence. Financial and insurance pro- business community. The selection of, and participa- grammes need to be established during the early tion by, any overseas organisation needs to be phases of the planning, with the same level of sensitive to the needs and wishes of the local attention given to their implementation and manage- business community. The rebuilding of the commu- ment as that given to the emergency response and nity’s economic viability is every bit as important to recovery plans and programmes. Professional, its recovery as is the rebuilding of its physical experienced international organisations can provide elements. An international organisation with proven invaluable services and make a significant contribu- experience in this area can be critical to a communi- tion to a disaster-stricken community’s financial ty’s ability to recover from the disaster. well-being, recovery and reconstruction.

Community relations. The success of any disaster recovery programme is greatly enhanced when the Conclusion general public is made aware of rebuilding priorities On 17 January of this year, Kobe and the surround- and kept informed of progress made. It is essential ing areas were hit by a 6.9 quake (officially referred that the community relations effort communicates to as the Hanshin quake). Over 5000 people were concern and a sense of positive, real movement to killed and over 75,000 homes destroyed. The earthquake victims, as well as to the general public. infrastructure damage was tremendous, and now, Initial community outreach efforts should include: two months later, the rebuilding effort is still in the • An information hotline such as “0800-RE- preliminary stages. As a result of that quake, the COVER”, which would provide constantly government of Japan is reevaluating their emergency updated voice-mail information selections for response guidelines and considering establishing a callers, as well as live operations for specific government agency along the lines of the Federal questions. Emergency Management Agency in the USA.

•Establishment of on-line computer information In hindsight, it is easy to say that emergency plans networks through the Internet or commercial should have been more comprehensive and building services such as CompuServe. standards more rigid. In reality, however, the •Production of multi-language, question-and- magnitude of the Hanshin quake, the location of its answer handouts, fact sheets and mail pieces epicentre and other factors make it impossible to

142 W R Washburn say, with any degree of confidence, that any of the look to their local and national governments for damage could have been avoided. assistance. There is often a sense that foreign aid constitutes charity and unwanted outside interfer- There are, however, some important lessons that can ence, thereby complicating the recovery and engen- be learned. In the first few weeks following the dering a feeling of indebtedness on the part of the quake, there was a great deal of confusion as to how disaster-stricken community. to handle offers of foreign aid. Granted, when any natural disaster occurs, the national government of This paper has attempted to define the elements that the affected area should be first on the scene. are the key to any recovery plan and to illustrate However, having a detailed and comprehensive plan their successful implementation through the Kuwait for utilising foreign sources of aid — whether example. In Kuwait, the enlistment of non-Kuwaiti financial, material, labour or a combination thereof organisations to support the recovery effort was not — can be critical to a timely, effective and economi- a request for charity, but rather a shrewd tactical cal recovery effort. move in disaster mitigation. Ultimately, a community that has been ravaged by a major disaster such One of the most pressing needs immediately follow- as this conference’s hypothetical Wellington quake ing the Hanshin quake was for emergency temporary is primarily concerned with reclaiming normalcy in housing and life support — approximately 310,000 the lives of its residents. By strategically involving people were forced from their homes. The Kuwait offshore organisations and maximising the skills and example showed that an effective procurement resources that they can provide a more timely, pipeline in tandem with coordinated support efforts economical and effective recovery can be achieved. of overseas organisations can help establish temporary housing and life-support systems when local Ultimately, however, the success of any recovery government resources are overwhelmed. effort will centre around the planning and preparation that has been done in anticipation of the disas- The Hanshin quake also revealed that cellular and ter. Assuredly, earthquakes will continue to rattle the satellite communications systems survived relatively earth — some causing significant damage. While we intact, while hardwire telecommunications suffered may not be able to anticipate the exact location and significant damage. For the proposed Wellington magnitude of these quakes, conferences such as scenario, it would appear that careful consideration Wellington after the Quake demonstrate the fore- of this information would be a key element in sight that will ultimately lead to the saving of human earthquake preparedness plans. As discussed earlier, lives. open lines of communication are crucial to disaster recovery efforts, and the establishment of cellular and satellite systems dedicated to emergency relief would be an essential and integral part of any recovery plan.

Finally, the Hanshin quake revealed that in spite of some of the most stringent seismic building standards in the world, infrastructure can be decimated in a matter of seconds. Periodic review of the seismic standards used in the construction of major regional infrastructure should also be an integral part of any earthquake preparedness plan. The tragedy in Japan may lead to the mitigation of similar catastrophic damage, provided that the lessons learned are shared and disseminated in a timely manner and subsequently incorporated into the emergency planning and recovery process.

In the aftermath of a natural disaster, members of the affected community, quite naturally, band together to face the recovery effort as a cohesive unit and

143 Wellington After the Quake

144 John H Christianson

The logistics of importing materials to the Wellington region, housing the workforce and construction bases

John H Christianson

Principal, Connell Wagner Limited, Consulting Engineers, Wellington

On a normal day, Wellington consumes in the order of 200 million litres of water. Most of this is delivered to the consumer through a trunk main, which is adjacent to the main Wellington faults for much of its length and its branches cross the same faults in several locations.

A major motorway structure contains over 25,000 cubic metres of concrete. All of the cement for this comes from outside of the region. A large steel-frame building contains 150 tonnes of steel per floor. Much of this steel is imported from overseas. The demolition of a large reinforced concrete or steel structure will take several months from the initiation of drilling for charges to final removal of debris.

This paper examines the logistics of resourcing the labour, plant and materials to reconstruct Welling- ton’s damaged infrastructure and to house the regular work force as well as the temporary emergency force. It draws on the author’s first-hand experiences of the 1987 Bay of Plenty and 1990 Luzon earthquakes and a visit to USA to study the reports of the 1994 Northridge earthquake and other recent events in USA. Some reference is made to the nontechnical press reports of the 1995 Hanshin event near Kobe.

Recommendations are made for the creation of a resource register to enable the required resource to be located, mobilised and delivered to the Wellington region in spite of a severely damaged infrastructure. Recommendations are made for the establishment of a register of overseas supply sources where New Zealand sources are considered inadequate.

Introduction • The 1987 Bay of Plenty earthquake cased severe damage in Kawerau, over 40 km away. The “Big One”, the Ms 7.5 event, will be larger than any event in the memory of most people alive in These huge distances are typical of those experi- New Zealand. There is a widespread belief among enced in the Philippines in the Baguio earthquake of many people that they will cope, that there will be 1990. This M 7.8 event caused severe damage over some disruption to their routine and that there will s a very wide area of a country, which shares many of be localised shaking damage and some minor the geographical features of New Zealand and whose roading inconvenience will occur. seismic code is closely based on the US Urban Building Code and SEAOC code. As in all earth- The reality of history and the anecdotal evidence quakes where seismic engineering has been prac- from previous real events within the region shows tised, many structures survived, but it is the magni- otherwise: tude and distribution of land damage and deforma- • The 1855 Wairarapa Fault movement was report- tion that should act as a stark warning to New ed to have been felt over an area of 900,000 km2, Zealand, and Wellington in particular. caused severe damage as far away as Wanganui (200 km from Wellington) and was felt 240 km The Philippines sit on the edge of the collision zone out to sea. between the Pacific and Indian Plates. Both strike/ slip and subduction events occur. The geology of the • The 1929 Murchison earthquake was accompa- islands includes large areas of soft sedimentary nied by vertical ground movement in excess of rocks of various ages, significant volcanic inclu- 3.7 m (12 ft). sions, deltaic rivers settled by urbanisation and large • The 1968 Inangahua earthquake caused substan- areas of soils that are liquifiable when subjected to tial damage in Wellington, over 200 km away. large earthquakes. In this connection, the use of felt intensity values as some sort of finite scale is

145 Wellington After the Quake misleading to the public and nontechnical profes- critical of all lifelines. This led to a further study sionals alike. Substantially greater damage will carried being out on behalf of the Wellington occur in an MM VIII event, which is caused by a Regional Council in 1994 to investigate the stability larger earthquake than for the same intensity caused of hill slopes throughout the region. The prognosis by a smaller event. The 1990 Philippines earthquake that emerges from this study is that ridge damage in was characterised by: Wellington begins to occur at MM VII intensity events, is likely to be more serious when slope • structural damage, particularly to rigid facades modification has occurred, such as in road cuttings, and eccentric or irregular buildings as far as 200 and will affect all roads through the region. Rail km from the epicentre; routes will be similarly affected. • extreme liquefaction damage 70 km away from the epicentre; Control during the post-disaster period • ridge acceleration, associated hillside erosion and The speedy and efficacious provision of the emer- river deviation over almost the whole length of gency response will not be possible without an rivers hundreds of kilometres long; and overview authority/organisation being responsible •the total destruction of engineered mountain for the prioritisation of restitution work once the roads both across and parallel to the ranges. civil defence emergency is considered to be over.

This event is largely ignored by New Zealand In the Wellington region, we have four separate city seismic professionals, engineers and civil defence authorities on the south side of a line drawn from the personnel alike. It serves as good model particularly Rimutaka Road summit to Waikanae, with several for total disaster logistics. district councils north of the line. Each has its own civil defence controller with liaison links to those in Logistics the neighbouring areas. The regional controller has overall responsibility. The Wellington regional and Logistics is considered to be the procurement and city councils are totally dependent upon outlying delivery of the right supplies, right quantities, in the areas for the restoration of infrastructure links to right order, in good condition, at the right place and their areas of responsibility. The Civil Defence Act at the right time, all to the maximum benefit of the allows a council to declare an emergency, even if it whole community. None of these logistics criteria is not affected, but is required to give assistance to can be satisfied without a contingency plan to cope another authority. The emergency can be declared with a modified infrastructure, since it is clear that for seven days and extended as required in seven- all supplies depend on transport for their implemen- day periods by the controller. The Wellington repair tation (Figure 1). period will extend into years rather than weeks and seven-day emergency powers are insufficient. In the Wellington Lifelines Study completed by the Centre for Advanced Engineering (CAE) in 1991, The Civil Defence Act allows for the appointment of roading, or the lack of it, was identified as the most disaster recovery coordinators and/or a commissioner for disaster recovery. Again, the STARLIFTER 40T CAP USAF 250 No. duration of the powers for these LOCKHEED C5 250T (over short range) USAF 100 No. persons seems to be woefully inad- ILYUSHIN IL76 30T+, Russian, Indian airforce equate, at 28 days for a scenario that All require long, > 1300m semi-prepared runway will last well beyond this period HERCULES 12T payload. All Commonwealth air forces, USAF, (Figure 2). Philippines and Indonesia. Very short runway. Can land on grass However, it does allow for an early BOENG 747 Major commercial freighter, needs long runway independent assessment of priorities. (SP version only, Wellington) There can be wasteful duplication of OCEAN BARGES Hawaii, mainland USA effort and, in some cases, competition RO/RO SHIP Australia for valuable resources causing re- HEAVY LIFT HELICOPTERS MIL 8 4T Capacity. West Coast South Island. sources to be spread thinly. After the Australia Backup Bay of Plenty earthquake in 1987, rapid action by consultants led to the Figure 1: Air/sea freight backup and capacities

146 John H Christianson

struction of schools, hospitals and CD Act potentially ill-suited to multi-million Regional Disaster government buildings, etc. These Set up structure with permanebt budget, reporting during emergency direct to Cabinet, with planned administrative structure. Structure to projects are to be completed within six have power to act when CD Act limitations affect ability to act effectively. months to two years. cf US FEMA and GoP PTFR • Level III — The reconstruction of damaged infrastructure and develop- Figure 2: Repair coordination and administration ment of new facilities to minimise the disruption of infrastructure in case natural requisitioning of all available stainless steel to repair calamities such as earthquakes should occur in a gin/vodka alcohol production plant while milk and the future, e.g. new alternative routes, new other dairy facilities remained out of action. By way towns, relocated production areas and re- of further example, there was no formal liaison configured transport networks. These projects are between the emergency engineering teams employed to be completed within two to five years. on behalf of the insurance industry and those acting for the civilian authorities. The only contact the The approved projects were scheduled, costed, private engineers had with the civil defence authori- prioritised and allocated to various government ties was to get passes for the restricted-access areas, agencies for implementation. The area affected by which enabled them to enter the area and get food at the earthquake was split into regions, most of which the emergency feeding stations. US specialist were controlled by the local regional office of the earthquake engineers with extensive knowledge of Department of Public Works and Highways (DPWH). disaster recovery scenarios received little or no Each region was allocated a Philippines consulting official assistance with their work and were forced engineer who administered the design and construc- to leave at least one site. tion of approved projects under the direction of the local DPWH Director. DPWH head office, assisted My first logistical recommendation is that we look at by ten international consulting engineers, provided the provisions of the Government of the Philippines technical direction and administered financial Republic Act 6960 by which was convened a appropriation against the original PTFR schedule of Presidential Task Force for Reconstruction (PTFR), approved projects. At this stage, it should be noted charged with the “identification, prioritization, that these consultants were exempted from the programming of projects and fund allocation within normal immigration and work permit requirements, three months of a specified date”. The PTFR thus allowing their rapid deployment. The Kobe reported directly to the Philippines’ President and relief effort is reported to have faltered due to Cabinet and included works, social welfare, treasury bureaucratic difficulties in such areas. and other key departmental secretaries. A multi- disciplinary support team assisted the group. Many The PTFR only had jurisdiction over government- of this team went on to become members of the owned facilities since all the international aid agency reconstruction implementation teams. As well as funds are soft loans for such projects. Their recon- scheduling the reconstruction programme, the PTFR struction not only allows government to function but was able to set design standards and set aside reassures the general populace that business is government tendering and contract rules for a short heading back to normal. The normalisation of life as time. Normal procedures returned after six months. soon as possible was a priority of the reconstruction targets of the PTFR. This carefully centralised and Projects were categorised into three levels of fully scheduled reconstruction programme achieved urgency: a considerable degree of success in three years. • Level I — Basic emergency repair merely for the Some 3000 schools, 200 town halls, many police purpose of getting the facility or infrastructure stations, several universities, many hospitals, back into use, e.g. a temporary Bailey bridge. hundreds of kilometres of highway, two large dams Projects are to be completed within two months. and a significant number of bridges were rebuilt or repaired. There was less success in the restoration of • Level II — The reconstruction or restoration water supplies due to changes in aquifer levels, back to original condition of a facility or infra- movement of well shafts, supply difficulties with structure to make it resistant to natural calami- adequate quality of pump components and difficulty ties, e.g. removal of slides, reconstruction of in establishing the reconstruction of river catch- damaged embankment and pavement, recon-

147 Wellington After the Quake ments’ training levees due to the erratic behaviour of Similar scenarios are presented for the Hutt Valley, river beds seriously affected by the debris resulting with almost continuous slumping along SH2 to from ridge erosion. Silverstream and high risk areas also at Point Howard and the Wainuiomata Hill Road. Continu- In the same period, almost no privately owned ous slipping is forecast for the Rimutaka Hill Road facilities were reconstructed. with the added complication of downhill slumping, which is more difficult to repair. SH 1 and SH 58 are Centralist and interventionist government is frowned in similar conditions, with severe risk between upon in New Zealand, but it works well in the major Plimmerton and Grays Road, at Paekakariki on both disaster scenario. The probable post-event disruption the state highway and the older hill road and slips on of the Wellington region due to infrastructure SH 58 at the Haywards end. damage lends itself to technically-led structure, as outlined above. Multiple slipping produces separate problems other than causing severe local disruption at the time. The It is significant that the international aid agencies, huge quantities of debris to be disposed of are often such as the Asian Development Bank, which have pushed over the side of the road without too much more experience of disaster relief than anybody else, thought being given to where it goes. Loose debris place great stress on the reconstruction of a coun- will usually find its way into the nearest catchment try’s logistic infrastructure system in disaster relief and thence migrate downstream. Local authorities programmes. have the power to ignore the requirements of the Resource Management Act in emergency situations. Roading logistics for Wellington However, the problem may not have been fully thought through. Again, using the Philippines Road vulnerability example, consider the problems of the Dalton Pass The study that followed the CAE lifeline study in similar topography and geology to the Rimutaka (1991) gave the threshold of land damage as a Hill Road: immediately after the 1990 earthquake seismic event exceeding MM VII in intensity. It there were four significant slips per kilometre, and predicted intensities in the IX to X range. At this after one rainy season the slipping had become level of shaking, it is predicted that no road or rail almost continuous and the river at the base of the hill link out of the region is exempt from the probability slopes had risen by several metres because of the of significant slipping and/or hillside modification. migrated debris. Some of these slips have the potential to be very There are not many well documented accounts large. One fairly recent (1855) seismically-induced generally available that quantify the clearance of slip can be clearly seen by today’s travellers — the seismically induced slips in New Zealand. In 1994, “gold slip” just to north of the BP station on the Hutt the clearance of the single large slip on SH 73 at Road had a volume of approximately 500,000 m3. Arthurs Pass took three weeks and costs were a The study suggested that there is a significant to significant proportion of the $1.7 million spent in severe risk of major slipping — between 10,000 and Canterbury that year. In the same year, Transit New 100,000 m3 per slip — for over half of the slopes Zealand spent just over $4 million on other emer- adjacent to the Hutt Road and SH 1, between gency work in Haast and Milford and a total of Wellington, the Aotea Quay junction and Johnson- $6.33 million on unscheduled emergency work in ville, and SH 2 to Petone, with very major slipping the South Canterbury, Otago and Southland regions. at the BP station and the gold slip site. Within the This has been assessed to average out at approxi- city, the roads to Ngaio, Khandallah, Karori, Mira- mately $600,000 per km. Individual highway mar, Hataitai and at Seatoun and Happy Valley are component costs are high. Gabion retaining walls 3 given the same risk category. The route along the can cost $600/m and State Highway bridges hills between Ngaio and Johnsonville also has average out at $42,000/m. To repair/reinstate some several risk points. 50 km of road with a dozen bridges and some gabion wall work could cost $100 to 150 million and Many of the roads noted act as either critical intra- require 1 million working hours (450 to 500 workers city feeders or offer diversion routes if the state working for a year!). highways are blocked for any reason.

148 John H Christianson

Bridges suspect survivability, e.g. Kelburn Viaduct, and The CAE lifeline study (1991) also noted that the failure of these could isolate individual suburbs. To probability of bridges being put out of service due to reinstate each of the bridges noted could take an fault movement through the bridge is very high at extended period, a year or more to build, excluding Silverstream, Normandale and Thorndon. These design time. With a total deck length in excess of potential failures are critical to the Wellington 600 metres, the repair programme is about two- region. Silverstream (Fergusson Drive bridge) thirds of the total of State Highway bridges built in carries over 50 percent of the region’s water; on a the years 1992-1994 and has a probable construction normal day, Wellington consumes about 200 million value in excess of $25 million, excluding the costs litres of water. Over 30 percent of the region’s dry of demolition. foods comes from the supermarket distribution Assuming major use of precast concrete, all beams warehouse, which is on the wrong side of the same would need to come from Otaki or Hastings along bridge to be of service to Wellington immediately roads that I have already demonstrated are unlikely after the quake. to be available. In the Philippines, the sensible Bridges consume large quantities of plant, labour alternative of casting on-site was adopted and full- and materials. Shell Gully motorway structures, scale mobile batching plant were used. I am not which are not considered to be significantly at-risk aware of such plant being available in New Zealand structures, involved the movement of 200,000 m3 of and none is shown in the Contractors Federation earth/soft rock, pouring 20,000 m3 of concrete, Blue Book (Figure 3). drilling 2 km of piles, and placing over 2000 tonnes Ignoring the traffic congestion issue, it is clear that of reinforcing steel and 40 km of stressing cable. Up the two most important bridges in the region are to 250 tradesmen were employed for up to four those at Silverstream and Seaview, since they are years. The contract value would be $40 to $50 prime supports for Wellington’s water, followed million at today’s rates. Thorndon Overbridge, closely by Plimmerton. Although inconvenient, which is an at-risk structure, employed up to 340 deviations do exist for all other bridges, and most people, a peak that was maintained for two years. At can be temporarily reinstated using Bailey bridging. today’s rates, the construction cost would be in the Transit New Zealand currently carries stocks outside order of $90 to $100 million. Demolition of the the region, and componentry may be hard to provide structure would probably take some 300,000 work- due to highway disruption. Seismic “hardening” of ing hours (150 years!) Conventional high use of Thorndon is now being planned and it is to be hoped unskilled labour has been allowed for, since it is that the retrofit is complete before any major anticipated that hydraulic plant would be put on road earthquake. (Retrofitted bridges performed very well work and reinstatement of buried pipelines. Control in Northridge in 1994.) of this activity would be difficult. Enquiries within the trade suggest that there are only 20 skilled Some thought needs to be given to preparing demolition managers able to work in engineered riverbed crossing contingency plans and carrying out heavy demolition and only a handful of engineers preparatory approach work now. For example, there with the requisite skills to advise. Clearly, there is a are several locations along the Hutt River where a need to upgrade this bridge complex since, as ford is easy to create and where land ownership does discussed above, it would take some five years to not present a problem. A good example is County rebuild it. PROBLEM SOLUTION Other key road bridges in the region that are at risk No local stocks from destruction by shaking a. Heavy Bridge Scaffold Air freight ex Australia (3 bridges) or fault movement include b. Bailey Bridge Units Sea transfer ex Christchurch and Wanganui (barge or ship) Melling, Normandale and Distribute by Mil 8 helicopter (4 tonne capacity, Petone bridges along SH 2, based on West Coast, South Island) the Pipe Bridge at Seaview, NB: Bailey bridging flown into Anchorage 1964 and the SH1 bridge at c. Large Hydraulic "Nibbler" Air freight if required ex Auckland, Australia and Plimmerton. Some signifi- Japan. Barge/helicopter distribution cant suburban bridges have Figure 3: Bridge repair equipment — urgency

149 Wellington After the Quake

Lane at Silverstream. Preparatory work such as this on the reconstruction of damaged structures and can be timed to coincide with slack plant periods and utilities will be severe. It is important to consider also serves as a constant reminder to the public that what the reconstruction need will be. earthquake preparation is one of the best forms of damage mitigation, other than getting the design Ports right in the first place. Disruption will also occur due to liquefaction and shaking damage at the airport and in the port area. Roading is critical to the reconstruction of This will make plant replenishment difficult if stocks the whole Wellington infrastructure are topped up from South Island. Ports were dam- All construction materials are either delivered to the aged at Northridge, although they are located over region or distributed within it using the roading 40 km from the epicentre. It is estimated that the network. Even sands and road and concrete aggre- port of Kobe will be out of action for four months gates that are manufactured locally are sensitive to due to liquefaction damage. The nature of construc- the stability of the hills and/or the availability of this tion plant is such that it is too large to arrive as network. For example, the coastal quarry at Owhiro container cargo and will need to be unloaded by Bay and the several quarries alongside SH2 in the cranes, which operate in the older and more vulner- Hutt Valley have threats to their production due to able area of the docks. Damage such as that outlined loss of production faces from seismically-induced above will affect the repair programme where sea slope modification, the same mechanism that puts so delivery of materials and plant is necessary. A much of the region’s roading at risk. survey should be carried out now to determine which parts of the local coastline would be suitable If all routes are affected to their maximum potential, for unloading heavy plant using tank-landing type then a decision needs to be made now as to priority vessels should no other route be available. Supply for reconstruction in the future, since it will not be bases could be set up near these landing areas using possible to tackle all routes simultaneously. council-owned sports grounds (Figure 5).

In the USA in the period following the Northridge Since sea bed level change is a characteristic of large earthquake in 1994, it took three months to reopen Wellington earthquakes, it is suggested these base one of the critical freeway intersections, even given areas be sought outside the main harbour, e.g. on the the huge resource base available. Dalton Pass in the southern beaches and west coast in the vicinity of Philippines was shifted to a completely new align- Porirua. ment in some areas and was able to take traffic — with difficulty — inside a month, but regular traffic Buildings conditions were still not available three years after the event in spite of an enormous effort involving Size of the problem the government and three aid agencies. No reliable all-weather road had been reopened over the central The extent of damage in unit and dollar terms is Luzon mountain range after three years, and detours outlined in other papers presented at this conference of several hours were often necessary. or used as background material. These give cold figures but specifically exclude timetable and labour New Zealand’s resource base is not large. It should availability considerations. Firstly, it must be be noted that the NZ Contractors 1994 Contracting pointed out that there is as much range in the figures Industry Directory lists only 23 bulldozers and 62 as there is in the prediction of damage. They are wheeled loaders in the Wellington, Wairarapa and variously put between $3 to $17 billion for housing Manawatu regions. These are the key plant items required for large-scale debris clearance. The nearest PROBLEM SOLUTION significant motorscraper resource is in the Hawkes Insufficient Regional Resource Bay (Figure 4). Motor Scraper and D8 Import from other NZ locations (by barge) landed on beaches if docks inoperable It is clear that restoration of full roading capability to Road priority to be incorporated in Regional CD Plan the region could be a protracted affair, even without considering the damage due to the effect of liquefac- NB: Maximum payload Lockheed C5 125-250T depending on range (Ohakea) tion on valley floor and coastal roads across silts and sands. The effect of highway damage and disruption Figure 4: Road repair plant — urgency

150 John H Christianson

up-to-date seismic PROBLEM SOLUTION inventory for the Historically put out of action by land 1. Identify possible beach landing sites for movement/shaking first wave emergency plant Wellington region. Small helicopter fleet 2. Ensure microwave link via Hawkins Hill to Christchurch has redundancy For the purposes of 3. Investigate use of SH2 for STOL aircraft this study, the cost of (700m unimpeded straight available). Trial flight damage reinstatement 4. Christchurch, Ohakea alternatives and repair has been 5. Inventory of crawler cranes required assessed at $4 billion. 6. Limited helicopter fleet to be augmented This corresponds to (NZ and Australia) the full reconstruction of two large buildings Figure 5: Port, airport — urgency and 100 or more only. The lower figure corresponds to 100,000 medium buildings, major repairs to six large build- homes, which I consider too high. Forty thousand ings and substantial repairs to some 1800 medium- homes were destroyed in Kobe. sized buildings following demolition of the damaged portions. These figures are entirely notional and The figures need to be put in the context of normal must not be taken to indicate that Wellington’s large building activity. In the year ending March 1994, the buildings pose a significant risk. It is fair to say, total value of building work in the Wellington however, that all major earthquakes bring their fair statistical area was $352 million. In the same year, share of nasty surprises. the value of building work in Auckland was $1049 million, South Auckland $423 million, Canterbury To gain some indication of the logistics of building, $398 million and the remainder of South Island $378 the Museum of New Zealand building will have million. If we just take the lower figure, the pre- consumed 22,000 m3 of concrete and 39,000 m2 of dicted damage will equate to about 8.5 years of mesh and employed 250 people for long periods present workloads or be nearly equal to the total when completed in 1997. The Bank of New Zealand annual cost of New Zealand housing in the year Centre used 10,000 m3 of concrete, 37,000 m2 of ending March 1994. If the higher figure is correct, mesh and nearly 4500 tonnes of steel, and has and it draws heavily on the Edgecumbe damage 12,000 m2 of precast concrete panels on the facade. ratio, the ratio of the Wellington losses compared to It is 25 storeys from the ground to the roof. At its the national construction total is very large whether peak, some 250 people were employed on its we are considering time or cost to build. After the construction (Figures 6 and 7). Loma Prieta earthquake, some 12,000 housing units were lost or severely damaged, and 30 to 35,000 Accommodating imported labour were damaged to a lesser degree. By 1994, most of It seems likely that 9000 to 10,000 additional the single-family stock had been repaired, but less tradespeople, at least, would be required to work on than half of the multi-unit homes had been repaired. the commercial buildings and may be as many as The possible value of commercial damage is not so 5000 on homes. There are approximately 65,000 easily defined. The Edgecumbe commercial figures employed in the industry nationwide in all trades, of do not readily translate to the Wellington scenario which 30 percent are in the Auckland area. There- and there is greater variation in the size of loss fore, the additional building load in Wellington anticipated. For commercial buildings, I have seen approximately equals 75 percent of Auckland’s figures ranging from $100 million to $24 billion. It normal work load. However, a fact to be considered is my opinion that the lower figure is too low and the is that commercial demand is dictated by normal higher is unlikely. At the time of writing, there were financial and commercial conditions that impose a still 140 or more notified earthquake-risk buildings smoothing curve on demands. It is quite normal for in Wellington’s central business district. There is a very large projects to require assistance from considerable number of pre-1935 concrete buildings overseas to top up our small labour force, particu- and a large stock of reinforced concrete and riveted larly in the technical and supervisory areas. For steel-frame buildings built prior to 1970 in the same example, up to 25 percent of the supervisors for area. Some of the concrete ones are not in very good Marsden Point Refinery were Australian, and the condition. Most have stiff, rigid facades. There is no scheduling for the project was carried out in India.

151 Wellington After the Quake

MATERIALS SOURCE large building is not a common occurrence in New Zealand. There are no local Cement, South Island Stored in dockside silos May be inaccesible by ship contractors skilled in implosion tech- Transfer from alternative silos at niques, the most effective way of demol- Hawkes Bay ishing large buildings. Just setting the Critical material dependent upon charges for a seven-storey building can roading take a month. The demolition of large Aggregates, Local Manufacture Production affected by hill face slipping buildings takes almost as much detailed Distribution dependent upon engineering as their erection. The time roading integrity scale is long — Bullocks Department Structural/Reinforcing Steel All manufactured outside of region Store in Northridge was still being Minimal stocks (2-4 months) held demolished six months after the earth- Not cost effective to fly. Barge quake. One of the significant constraints delivery as plant. Requirement within national resource was the need to sift high-value contents from the debris as recovery to minimise Figure 6: Building materials — urgency the contents claim. This was also the case in the Hannahs fire in Wellington in BUILDING MATERIALS SOURCE 1980, where one of the tenants was a Plastic pipe Continuous flow production in manufacturing jeweller. This conflict will Auckland arise in Wellington, particularly if National resource able to cope with separate loss adjusters, insurers and demand Distribution dependent upon advisers are involved. roading Able to be locally transported by If the building is just damaged, the helicopter situation can be more complex. The Glass No local manufacture. Stocks held are low repair costs for structural weld repairs in Mass dictates distribution by rail/road Northridge were often greater than the infrastructure (refer roading). Joinery building value. Owners just walked away, ex Auckland leaving the city council with the problem. Hardware, Electrical, M&E Plant Substantial manufacture out of region (and overseas). Delivery Tenants had probably left long before. dependent upon intact infrastructure Inspection Figure 7: Building materials The question of inspection to determine the next action following the earthquake is a major It is not possible to accommodate these people in logistical bottleneck. There are only 350 insurance conventional short-term accommodation. Since assessors in the country and not all can handle some will be in the capital for several years, they are buildings. There might be only 200 to 250 able to likely to buy a home. Many of the single, more work in this area. There will be a need to supplement mobile, workers will seek rental accommodation. It these assessors with overseas personnel. About would be sensible to open a register now of home- 18,000 buildings were destroyed in Kobe; 3000 owners who would be able, and prepared, to accom- buildings were “red tagged” after the earthquake in modate emergency workers. There are two valuable Northridge. Assessment is carried out by inspecting reasons behind this suggestion. Preparation is one of engineers in the immediate aftermath of the event. the best forms of mitigation. It will enable a wide They will need to be serviced by engineers familiar cross-section of the community to become aware of the seriousness of the threat. Importantly, such a scheme would scatter tradespersons PROBLEM SOLUTION throughout the city (Figure 8). a. Most hotels in area of greatest Establish resource inventory now of dislocation people prepared to offer accomodation Repair b. Distribution of labour Zone city using postal codes for sector identification. Resource of The rebuilding programme can only start accomodation to be evenly when the damaged buildings have been distributed in sectors repaired or made safe. The demolition of a Figure 8: Accommodation

152 John H Christianson with New Zealand seismic design philosophies (or normal load, which continues since most of the similar) if public safety is not to be compromised region’s infrastructure will remain intact, although and confidence in the “authorities” is to be main- severely disrupted. A two-month moratorium was tained (Figures 9 and 10). imposed on new construction after Kobe.

It is extremely difficult to quantify the numbers of Forward planning inspecting engineers required. It took two engineers three days to inspect, quantify and agree the princi- It is clear that we will have a huge struggle to meet ple of the repair of the NZ Distillery plant at Edge- both the building and the technical requirements cumbe and many more days to implement current imposed by the event being studied. In conversations code compliance provisions that were part of the with Federal Emergency Management Agency insurance cover. A team of 20 engineers from (FEMA) personnel in Chicago, it was made clear several consultants working together was assembled that FEMA only coped because liaison and manning to inspect the damaged paper plant at Kawerau. difficulties exposed during civil emergencies 18 Houses are easier to inspect. One engineer can report months beforehand and severe fires in 1993 had on three to four per day. Using the building numbers forced many changes in the coordinated manage- noted above, averaging commercial buildings at one ment of an emergency. In spite of this, the city of per two days and four houses per day gives an initial Los Angeles had come close to being declared a assessment load of 8000 engineer days (100 engi- federal emergency in 1994. The State of California neers for 80 days). has adopted a Standard Emergency Management System. For the last seven years, the Federal Gov- A major logistic problem potentially exists in the ernment has been working on the development of a issuing of building consents once designs have been Federal Response Plan coordinating the activities of completed. Some authorities are currently using all 27 emergency response agencies. of the time allotted in the Building Act. The repair and restoration demand is a load on top of the

PROBLEM SOLUTION a. Technical assessment IMMEDIATE NEED 250 engineers for 30 days Internal source (NZ) b. Loss Adjusters IMMEDIATE AND ONGOING NEED 250 available NZ Needs to be augmented from US. EERI best source for initial inventory. SOURCE NOW c. Renewal/Repair Design 600 engineers/draughting staff. NZ resource (5 year programme) d. Renewal/Repair Reconstruction Unskilled — Using workforce unemployed because (5 year programme) of earthquake. Skilled — NZ Resource. 200 3000/yr required supervisors required ex overseas

Figure 9: Labour — technical and trade

PROBLEM SOLUTION a. Demolition management Very small NZ resource Resource inventory to be established now using UK and US as resource base b. Large structure demolition Knowledge small Loma Prieta, Northridge, Kobe demolition management to be researched now NOTE: URGENT NEED — DEMOLITION IS A CRITICAL COMPONENT OF RECONSTRUCTION b. Disposal Management Resource Management Act imposes constraint. Local Authorities need to establish emergency zones now and incorporate in DIstrict Schemes

Figure 10: Labour — technical trade

153 Wellington After the Quake

Conclusions land personnel to such contractors as sponsored • The CAE 1991 lifeline study promoted a whole training. series of initiatives by the utility companies to • It is likely to take at least five years to rebuild upgrade their systems. The Wellington Regional most of the damaged structures. Some will never Council’s assessment of hill stability is a docu- be rebuilt because of owner and tenant flight. ment that paints a disturbing picture of logistics chaos following a substantial earthquake such as • The immediate post-earthquake phase will that hypothesised for this conference. Wellington require large numbers of engineers and assessors City Council’s Emergency Management Office with assessment skills for damaged structures. has achieved a high profile within the region. This pool probably does not exist. Meaningful discussions should be initiated with the relevant • The above are government or quasi-government industry organisations and the major employers initiatives. In my research for this paper, it to prepare resource schedules and logistics became clear that there are some enormous gaps arrangements now, so that people with the in the communication between government and relevant skills can be mobilised without delay. industry boards such as the Contractors Federa- tion. Much work in the research and reporting of • The papers presented at this conference and the earthquakes and observing afterwards whether findings resulting from the plenary sessions the lessons learned are being implemented is should be used to initiate a disaster recovery done on an ad hoc or voluntary basis. It was a manual as a companion to the book prepared by very clearly expressed opinion during my CAE in 1991. The manual should be properly questioning that the civil defence organisation at funded by government as a necessary component national and local level is seriously, and even of civil defence disaster planning. dangerously, underfunded. • The Civil Defence Act is written around rela- Acknowledgements tively short-duration disasters. Some serious This paper was written at the request of the Earth- study should be given to establishing provisions quake Commission, who have made much back- for concerted action such as is possible in the ground material available and who funded a trip to Philippines and USA under their legislation. USA to participate in the 1994 EERI Conference, • Severe disruption of the built road and rail which reviewed a wide range of studies, many of a formations due to land modification will occur. non-engineering nature, of earthquakes in the last This will prevent the movement of repair materi- ten years. This encouragement is appreciated. als into and throughout the region. An investiga- The contract for my services to the Government of tion should be carried out into the feasibility of the Philippines included approval to use information creating emergency beach landing facilities clear from the project for technical papers and presenta- of the most likely failed existing port areas. tions. I am grateful for the government’s willingness • It is estimated that 15,000 extra workers could be to share the information in this way. I appreciate the required for construction work once demolition willingness of the many people in other organisa- had been completed. These people will need to tions who have been prepared to make information be accommodated. It is suggested that an accom- available for this paper. modation register be kept. The foresight of the Centre for Advanced Engineer- • There is a shortage of major plant within the ing together with the huge support from Wellington region. Meaningful discussions need to be held Regional Council in the production of the Welling- with the Contractors Federation to compile a ton Lifelines book was a landmark for Wellington register of available plant and to prepare a and heralded the widespread cooperation among transport contingency plan to relocate it if land professionals from differing industry groupings, transport proves impossible. which has had such a positive effect on earthquake • There is a major shortage of contractors skilled disaster planning in Wellington. in the demolition of tall buildings and heavy structures. Contingency plans should be put in I also thank my wife, Pat, for her forbearance and place to bring in US or other overseas expertise. understanding while I was overseas in the Philip- It would be prudent to second some New Zea- pines experiencing that model earthquake that has so

154 John H Christianson focused my thoughts and awoken me from the for Mercalli Intensity. EQC Report, February. apathy that seems to afflict most New Zealanders and successive governments when it comes to Hall, John F (ed.). 1994. Northridge Earthquake seriously thinking about earthquakes. January 17, 1994. Preliminary Reconnaissance Report. Earthquake Engineering Research Institute, The opinions and findings presented in this paper are Oakland, California. my own and do purport to represent those of any other person or organisation. They are based on a New Zealand Contractors Federation. 1994. 1994 close personal involvement with nearly all of Contracting Industry Directory. NZ Contractors Wellington’s major fires over the last 20 years, the Federation, Wellington. Hutt Valley floods in 1976 and as a member of teams participating in post-earthquake recovery at Statistics New Zealand. 1994. Key Statistics. Edgecumbe in 1987 and the Philippines following Statistics New Zealand, Te Tari Tatau, Wellington. the large 1990 Baguio earthquake. Stevens, Graeme R. 1974. Rugged Landscape. The My old school and borough motto is “Respice, Geology of Central New Zealand. A H & A W Reed, Prospice”: Use the lessons from the past to prepare Wellington 1974. for the future. As far as earthquakes are concerned, Transit New Zealand. 1994. Annual Report, 1993- there could not be a more apt exhortation. 1994. Transit New Zealand, Wellington.

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Centre for Advanced Engineering. 1991. Lifelines in Earthquakes — Wellington Case Study. Project Summary and Project Report, Centre for Advanced Engineering at the University of Canterbury, Christchurch, New Zealand.

Christianson, J H. 1994. Report to EQC on the Fifth US National Conference on Earthquake Engineer- ing. EQC Report ( unpublished ).

Civil Defence Act 1983. New Zealand Government, Wellington.

Comerio, Mary C. 1994. “Gaps in the post earthquake housing delivery process”. Proceedings of the Fifth National Conference on Earthquake Engineer- ing III: 394.

Dowrick, D J. 1990. Study of Potential Losses to the EQC in Large Earthquakes in Central New Zealand. EQC Report, November.

Dowrick, D J. 1991. Study of Potential Losses to the EQC from Damage to Housing in Large Earth- quakes in Central New Zealand. EQC Report, August.

Dowrick, D J. 1992. Potential Loss Estimates for the EQC Derived Using Different Attenuation Models

155 Wellington After the Quake

156 Discussion Physical reconstruction

hris Henri (Insurance Council of Australia) although insurers claim that house insurance goes a asked about priorities for flooding mitiga- long way towards relocating people, the land value C tion, using the example of a town in Aus- is diminished and that affects owners of large assets. tralia where flooding is a non-insurable risk. The After the 1987 Edgecumbe earthquake, construction town had not maintained its levee very well, but it prices shot up for about three weeks, then fell back. sandbagged its cemetery although the water went David Hopkins added that information about post- through the town. Claire Rubin noted similar disaster inflation was largely anecdotal, but his examples from the 1993 flooding in the midwestern enquiries suggest that it would be less than that USA. In one case where caskets were displaced from suggested by Dr Walker. the cemetery, it caused considerable distress, and in another, citizens worked all night to sandbag a Hal Cochrane (Colorado State University) spoke of historic monument. In Salt Lake City, the solution inflation being determined by the ratio of demand to adopted for flood waters from a spring thaw was to capacity to supply. If the total supply is used in one sandbag the sides of the main street to channel the place, it leads to postponement elsewhere. The water through. inflation noted in Darwin was a natural market response. He also found it difficult to believe that John Blakeley (Centre for Advanced Engineering) New Zealand could rebuild without resources from asked whether there should be a restriction on Australia. Tony Lanigan replied that although he building projects in the rest of New Zealand follow- was not an economist, he disagreed. An efficient ing the earthquake in order to control prices because industry should not have spare capacity, but this sort of the post-quake demand in Wellington. Tony of thing was difficult to determine when he ap- Lanigan avowed himself a free marketeer, and proached them. The materials supply industry was pointed out that Australia was only a week away for sensitive to questions about excess capacity. building materials and labour. He believed the main restraint would be housing the labour force and that John Norton (Hutt City Council and Wellington rebuilding Wellington would not adversely affect Earthquake Lifelines Group) referred to John construction projects in the rest of the country. Christianson’s belief in New Zealand’s ability to George Walker (Alexander Howden Reinsurance) cope despite his conclusions, which were rather supported Dr Lanigan’s view because the recon- more sober than those given earlier by David struction phase will be controlled by whoever Hopkins and Tony Lanigan. Ability to handle controls the money. In the Darwin cyclone disaster, response planning depends on being able to assess the Australian government owned the town and post- the likely earthquake damage in advance. In his disaster inflation there was about 75 percent. The work with the Wellington Earthquake Lifelines impact was felt as far away as Townsville. The Group, he had intermittent optimism, and wondered Newcastle earthquake was different because the whether Mr Christianson was also optimistic about government only controlled building standards and recovery. John Christianson referred to the need for post-disaster inflation was about 20 percent. The better information for a clear picture, because he had main cost influences at Newcastle were the differing not realised the extent of the problem before work- views of clients’ engineers and insurers on what ing on his paper. For example, a seismic inventory is remedial work was required. However, Hurricane needed and should include all old buildings as well Andrew had caused significant post-disaster infla- as lifelines. Susceptibility to landslips was also tion, not only in Florida — it had affected building important and some work on utilities done by the prices over the whole of the USA. This was the big Wellington Earthquake Lifelines Group is now problem for insurers rather than underinsurance in being extended by the Wellington Regional Coun- that post-disaster inflation is not allowed for. He said cil’s landslip project. Recovery planning needs to be that Darwin was not underinsured, but it was post- holistic. If it is not possible to demolish, then disaster inflation that caused the problem. He called rebuilding cannot proceed. Without a tip facility for for pre-disaster planning involving a group of asset materials from demolition and good road access, managers and their insurers. Tony Lanigan said that rebuilding cannot proceed. All major funding

157 Wellington After the Quake agencies for disaster recovery stress the need for Dave Owens (NZ Fire Service) asked for comment good roading access to restore the economy. David on the proposed Transmission Gully highway route Hopkins said that he was a little more optimistic out of Wellington. In reply, John Christianson said about what might happen because Mr Christianson that he believed this project justified itself entirely as had taken the worst that could happen and assumed a strategic civil defence route that would be invalu- it would apply everywhere throughout the Welling- able after the earthquake. Transit New Zealand has ton region. However, a seismic inventory was an other priorities, but it is a government matter. He excellent idea. In a study he had done on bulk water fully endorsed the Transmission Gully project with supply, they walked the lines to see the situation and no reservations. were able to put up proposals for mitigation over 20 years. They had also looked at the airport and found Giles Lesser (Wellington City Council) commented the restoration time was not as severe as it had at that the Council’s Roading Department is preparing first appeared. Building insurers were forcing emergency response plans. Like David Hopkins, owners to take inventories and do more about their they are walking the routes and looking at issues properties. John Christianson affirmed that an such as those mentioned. Work is progressing in this optimistic view should be taken that New Zealand area, but it is not yet complete. would be able to cope with reconstruction following the earthquake. If taken over a five-year period, the In closing the session, the Chairman, Dr John Wood construction activity would be no more than what (NZ National Society for Earthquake Engineering), happened during the mid-1980s building boom, but thanked the Earthquake Commission for providing he was still conscious of what needed to be done. It financial support for reconnaissance team efforts would take months to get buildings repaired while following major earthquakes overseas. He also getting lifelines re-established and somebody has to thanked EQC for their funding of earthquake decide what activities get priority. Roading access is research in general in New Zealand with $600,000 very definitely a priority as a large truck can carry in being made available over the next two years, as as much material as a plane. Tony Lanigan spoke of well as their innovative step of initiating this the need to establish a “first-help” system. Follow- conference. ing the Edgecumbe earthquake, local people and those brought in from outside wanting to help were wandering around with nothing to do until materials were made available to them.

Ian McLean (Earthquake Commission) asked Bill Washburn how difficult it might be to get materials into Wellington compared with Kuwait. Bill Wash- burn replied that advance planning was the key. He said to plan for the worst in advance of the earthquake and hopefully it would not come to that. He suggested a staging centre somewhere near Auck- land, then trans-shipping in the direction of Welling- ton, but it is necessary to get the paperwork in place now. He wrote no requisitions until the Iraq war was over. Tony Lanigan spoke of the possibility of using roll-on/roll-off ships for bringing in material supplies and equipment. He believed that the challenge would be taken up. John Christianson added that in the USA, the Federal Emergency Management Agency had managed to handle the Northridge earthquake effectively only because they had several stockpiles of materials handy. He suggested the need to establish a strategic store of materials on the Wellington side of the hills.

158 John E Feast

Legislative Framework

159 Wellington After the Quake

160 John E Feast

Current planning and construction law: The practical consequences for rebuilding Wellington after the quake

John E Feast

General Manager, Harcourts Commercial Real Estate, Wellington and Past President, NZ Contractors Federation Inc.

This paper explores the practical application of current legislation as it may affect the issue of consents, planning matters and the physical rebuilding of the capital city after a significant seismic shake has resulted in extensive property and personal damage in the Wellington region.

The manner in which Government, territorial authorities, professional planners, designers and advisers must work with the builders, developers and institutional investors to reconstruct services and structures will be considered, together with the practical problems of effectively meeting the requirements of the legislation for approvals, consents and title from the viewpoint of the rebuilder.

The paper draws on the views of local professional advisers, territorial authority officers and construction industry members who will together be required to rebuild a city devastated by earthquake. The effectiveness of the legislation to regulate the reconstruction process in the event of a natural disaster is assessed.

Introduction Act”, states that the RMA: In 1991, the New Zealand Parliament enacted the is now the principal statute for the manage- Resource Management Act and the Building Act, ment of natural and physical resources and is two quite radical statutes that will continue to have a the principal statute for the management of significant effect in determining where, when and land, subdivision, water, soil resources, the how any new development or construction will coast, air and pollution control, including proceed in this country. Both statutes wiped a noise control. plethora of existing legislation, which had been developed over many years to regulate and control The RMA has been drafted to be consistent with an the planning and construction processes. The new underlying philosophy that any use or development Acts were intended to consolidate and simplify rules of resources and the environment centres on a and regulations that had been, for many, an expen- concept of sustainable management. It requires sive nightmare prior to 1991. territorial authorities to prepare a district plan and lists the matters that must be considered by the territorial authority when it prepares its plan. These The Resource Management Act 1991 district plans include district rules that prohibit, (RMA) regulate and allow certain activities in the area. Background to the RMA The RMA was developed and enacted to ensure that The RMA sets out the rights, responsibilities, and the environment was managed in such a way that legal obligations of individuals and both local and any development protected our clean air and water central government with the stated intention to resources for our own use and for plants and wild- ensure a balance between wide-ranging individual life; that noise levels were kept at an acceptable and commercial interests and community values. level; that there was adequate planning for parks and The Act is unusual in that S4 provides that the amenities; making sure our natural coastlines were Crown itself is generally bound by the specific preserved where possible; that mining developments provisions of this legislation. had a minimum of effect on the natural surrounding environment; that the principles of the Treaty of The Ministry for the Environment (1991a), in its Waitangi were recognised and observed, and that brochure “Resource Management, Guide to the land-use practices were adopted that preserved soil

161 Wellington After the Quake cover and avoided soil erosion (Ministry for the In simplistic terms, an application under the RMA or Environment, 1991b). the Building Act 1991 imposes a burden of proof on anyone wishing to change the status of a property to A practical assessment of the RMA show that the effects are acceptable. The view of a number of professional advisers to the Territorial authority discretion and the RMA construction industry, including the eminent local architect Ian Athfield, is that the RMA legislation Because almost any construction is a “controlled was not specifically designed to meet the develop- activity”, in terms of most proposed district plans ment and environmental requirements of the urban produced to date and these provide only broad scene and is better suited to regulating land use in its design guidelines, territorial authority planning wider definition in rural areas. officers have considerable discretionary powers to either approve or refuse a consent application. The Many advisers, planners and developers believe the applicant may be required to mitigate adverse RMA is far more subjective in its approach than effects, either real or perceived. Where public earlier planning legislation and, notwithstanding a notification of the application is made in accordance stated wish to have the legislation uniform through- with S93 of the RMA, S96 allows any person to out New Zealand, the emphasis on “sustainable make a submission on it. Any person who makes a management” and “intended outcomes” (Ministry submission may also appeal the decision under for the Environment, 1991c) has led to the view that S120. much interpretive discretion is held by the officer of the territorial authority who considers a particular Benefits arising from the RMA consent application. The RMA replaced some 20 major statutes, includ- There have been suggestions by some aggrieved ing the Town and Country Planning Act 1977, water applicants that the interpretation often being placed and soil legislation and laws covering minerals, on the phrase “sustainable management” has the geothermal resources, air and noise pollution, and same meaning as “zero environmental effect” and coastal development. Often there were conflicts that: within the existing legislation and complicated procedures that caused delay and added to costs for the time and dollar costs are running at three applicants for planning consents. to five times greater for a resource consent than they were for an equivalent planning application. Territorial authority compliance with provisions of the RMA (Barker, 1992) A number of applicants for consents to be issued in Indeed, it is the view of one leading practitioner in terms of the RMA or Building Act 1991 have planning law, Mr Jim Wiltshire of Simpson Grierson complained that the strict time frames for response Butler White, that many developers who made envisaged by Parliament when it enacted this key representations at the time of the law review to legislation are being avoided by some territorial support legislation to simplify and speed up the authorities (TAs). They have been accused of not processing of planning and building approvals for recognising commencement of time for response projects that may have had innovative or radical until an inspector has been ready to process and elements find the problems they formerly faced for consider the application, rather than from the date it those “difficult” projects now apply to all applica- was received. Alternatively, shortly before being tions for consents that have any non-standard required to respond in terms of the Act, some TAs element. have unreasonably requested additional information or explanation under S92 of the RMA to avoid the This may be because the legislation is new and time limit constraints on allowing or rejecting the significantly untested in the courts, but also because application. the RMA requires an extensive consultative approach. The applicant for a resource consent faces a Applicants have decided in most cases not to pursue heavy front-end loading of time and expense in any form of action to enforce the statutory obliga- making an application. tions imposed on the TAs where this has occurred because it has been considered by them as likely to

162 John E Feast be counterproductive — likely to further adversely The new building control system is designed affect the time for a response from the TAs con- to allow market forces to be combined with cerned or the prospects for a successful application. regulatory controls to ensure that the statutory purposes and principles of building District plans control can be achieved, with minimal compliance costs. Some TAs are now operating under transitional provisions, having publicly notified the proposed (Cameron, 1992) district plans. The Wellington City Proposed District The BA, its regulations and the building code have Plan was publicly notified on 27 July 1994 and it is been drafted: significantly different from the existing Transitional District Plan (formerly the Wellington District primarily to codify basic standards of health Scheme), which it will eventually replace. and safety and to provide for a performance based building control system. It is in terms of this plan that the city is likely to be (Cameron, 1992) rebuilt after the initial emergency. This district plan has been developed in accordance with the statutory The purpose of this new legislation was not only to requirements of the RMA. simplify building control. The BA also provides procedures for dealing with buildings deemed While the Proposed District Plan has some immedi- dangerous or unsanitary (part IX), earthquake-prone ate effect, the Transitional Plan will also continue to buildings (S66), change of use of buildings (S46), apply until the former becomes fully operative. It is building on land subject to erosion, inundation, or less rigid and doctrinaire about what can go where subsidence (S36). It clearly defines the functions, than the Transitional Plan: powers and duties of TAs (part IV). The City is divided into different ‘areas’. The plan addresses these areas by providing The Building Industry Authority objectives, policies and rules for the manage- In particular, the BA provided for the establishment ment of each. of an industry controlling body, the Building (Simpson Grierson Butler White, 1994) Industry Authority, which in terms of S12 advises the Minister on matters relating to building controls, The Building Act 1991 (BA) grant accreditation of building products and processes, reviews the operation of TAs, approves Background to the BA building certifiers and is responsible for education Whereas the RMA applies to all aspects of the on building control matters. This body provides the environment, the BA, on the other hand, specifically means by which a uniformity for materials and regulates all building work other than minor mainte- systems approvals and codification can be ensured. nance, low retaining walls and simple structures of less than 10 m2 floor area (S32(b) and the Third Obtaining a consent under the BA Schedule to the Act). However, even these minor The BA sets out the procedures for coordinating works must comply with the Building Code. building control with other legislation, such as the RMA, through a process that begins with the TA The BA replaced a multitude of former Acts, providing a project information memorandum. regulations and bylaws. It provides a performance- Sections 30 and 31 of the BA regulate the applica- based control system that, although it does not tion for and issuing of project information memo- regulate the appearance of structures or the standard randa (PIMs). A PIM may be applied for prior to of convenience, does have national application and applying for a building consent. Any application for is intended to be uniform. The BA takes account of a building consent is deemed to include an applica- environmental costs and benefits, protects other tion for a PIM. Details on the intended use of the property from damage and provides safeguards for site, location and proposed dimensions, vehicular the health, safety and amenity and energy interests access, disposal of wastes and other relevant devel- of the community. opment information are required from the applicant with the formal application, together with the fee payable to the TA.

163 Wellington After the Quake

The PIM, which will be issued by the TA after it has industry and TAs in relation to any construction received the detail it requires, will include informa- works. tion known to the TA: The approval process for consents and the meeting •identifying special features of the land con- of legislative requirements before, during and after cerned, such as potential erosion, subsidence of physical construction are recorded in Figure 1. the site, the presence of hazardous material and the like (if it is likely to be relevant to the proposed works); Rebuilding: Management in the aftermath • details of stormwater or sewer utilities or network utilities; and The conference is concerned with the effect on the Wellington region, but damage following the subject • an approval (subject to compliance with a earthquake will have had a significant effect through building consent and necessary authorisations) or the Wairarapa, the Manawatu, and into rejection of the proposed works. Marlborough, Nelson and possibly as far south as Canterbury and Westland, and there will be a large Practical assessment of the BA number of TAs involved in restoration of services The chief executive of the NZ Master Builders and amenities for the particular areas over which Association has given qualified approval to recent they exercise jurisdiction. outcomes achieved by his members under the Owner provisions of the BA. The (sketch plans) most frequent complaint Territorial authority from builders is that there (project information is no commonality of memorandum) interpretation, with Building producer (plans and specifications) individual officers of TAs imposing differing views on the requirements of the BA and its regulations. He Technical authority Building certifier reported that, where the proposed struc- (technical check) OR (inspection for compliance) tures fully comply with the requirements, time frames have been shortened. Outside of approval documents, problems are Territorial authority (building consent) frequently encountered. Many attempts at creative solutions to development or construction problems have led to consid- Territorial authority and/or Building certifier erable delay and cost. building producer OR (inspection for compliance) (inspection for compliance) The codification does not encourage innovation, although this had been mooted Territorial authority and/or as an aim of the performance-based building certifier consent procedures under the BA. In (code compliance certificate) reality, the lack of resources within TAs has meant that innovation has led to No further action needed for Compliance schedules only frustration. As a result, most developers majority of buildings for those buildings with have taken the easy way out and resorted automatic systems, etc. (minority of buildings) to established and approved procedures and materials that have limited the development of new design. Building warrant of fitness (minority of buildings) However, the BA has Copy sent to territorial authority clearly set out the programme and responsibili- Figure 1: The approval process under the RMA (Department of Internal ties for the construction Affairs, 1991)

164 John E Feast

Management roles Priorities: Initial In New Zealand, administrative roles in the case of The first priority for the TAs and the construction emergency are split between central and local industry must be the allocation of construction authority agencies and we still have to confirm who resources to the “big picture”, the re-establishment is going to call the shots and determine who directs of road, rail and air links with the rest of the country what. Discussions with officers of the Wellington and the removal of dangerous structures and debris City Council’s Emergency Management Office from built up areas. It should be noted that the RMA indicate that by mid-1995 the city will have a uses the existing environment as a reference against comprehensive Disaster Recovery Plan controlled by which to study adverse effect or impact. a disaster-recovery coordinator, the only pre- designated disaster manager in New Zealand. While Environmental effect: the yardstick the Wellington City Council may well be the best prepared TA in terms of emergency planning, it is In a city that has had much of its natural environ- not possible to ignore the facts that it is the capital ment destroyed through widespread slips, debris, city and that there are a large number of smaller TAs heavily damaged structures, liquefaction of soils and affected by the disaster. The scope and seriousness severely disrupted sewer, gas and water pipes, of the disaster will inevitably lead to the intervention against what standards is reconstruction work to be of central government, in my view, and it may be tested? impossible to look at Wellington in isolation from its The environmental impact at that time will be neighbouring regions from a practical viewpoint. immense, with roads and services collapsing along This is most likely to include the appointment of a Wellington’s extensive waterfront and heavy disaster commissioner to manage resources and set contamination from silts and sewage present as a priorities for recovery. Government is likely to pass result of seismic movement. Significant areas of legislation granting the commissioner or an emer- vegetation will have been brought down with slips, gency commission wide powers to deal with the closing off roads and streets, which will also have emergency for a certain term. suffered collapse due to the steep nature of the local This situation is similar to that in California, where terrain. Fire and flooding are also likely to have we were advised the state governor was involved in wrought havoc to the environment. The harbour and the disaster recovery programme from a very early waterways will be heavily contaminated with stage following the recent Los Angeles earthquake. detritus. The initial emergency response, too, will This involvement would be no more than the inevitably have caused a certain amount of unavoid- equivalent of a response from the Prime Minister of able ancillary damage. People and machines will New Zealand to a Wellington regional emergency. have been operating through the area affected to In fact, in the case of a major disaster in the USA, save lives and property and repair and reconstruct the state governor goes through the Federal Emer- basic access and services. gency Management Agency direct to the President The awesome and terrifying photographs from Kobe through a streamlined chain of command. in mid-January showing the devastation following the massive Hanshin earthquake will remain with us Reconstruction for some considerable time as a sobering reminder The early weeks following the earthquake will be of the havoc such an event can generate. absorbed in dealing with the overwhelming requirements of reinstating essential services, reopening Priorities: rebuilding roading, rail, sea and air links, and dealing with The next priority must be the “small picture”, buildings and properties that present an imminent making bearable the lives of individuals by reinstat- danger to health or the physical safety of citizens. It ing normal services and providing the needs of is against the background of the new legislation and shelter and the like. The medium- and longer-term other existing legislation, that the practical conse- picture, the rebuilding of damaged commercial quences of reconstructing the city following a property and general community amenities will be serious earthquake will be assessed. forgotten in the short- to intermediate-term.

165 Wellington After the Quake

When the time does come to focus on allocation of areas that are likely to suffer from the effects of the resources to the commercial rebuilding programme, earthquake. the initial efforts should concentrate on those portions of the city and region that are still “sound”; Properties that had not previously been the subject areas where the TA does not have to initially of a heritage order may now become of considerable determine whether there should be a future restric- environmental or heritage significance because tion on land use or structural designs and where others, formerly more important, have been lost. immediate restorative progress can be made. There may be disputes about total loss or the reinstatement of damaged heritage sites. Problems for the consent process Opportunities A number of problems will later become more apparent as more consent applications for recon- The city council may well see the disaster as an struction are processed. opportunity in disguise to replan the city in a form more appropriate for the future and will be in a The horizontal movement along the fault will position to take more radical steps than had the inevitably bring problems with land transfer survey earthquake not occurred. and legal title to property, with some structures now partially on another legal title. Physical property There would be little argument that, during times of may have been laterally and vertically displaced, but great stress, decisions or significant change which in survey reference points and boundaries will remain normal times might be the subject of much public constant. Along the fault line, this may cause objection, appear to become less contentious. It considerable problems where there has been a would, for example, be difficult to see how succes- movement of some four metres. This may involve sive governments could have implemented the the limiting of land transfer titles as to parcels while radical tax changes and deregulated the New affected properties are resurveyed and boundaries Zealand economy in the manner they did during the positioned to take account of actual occupation and 1980s and early 1990s had there not been an envi- some compensation because government guarantees ronment of economic disaster facing the country at title to property in New Zealand by legislation. that time.

The TA may also have to consider applications to The risk of inaction rebuild on land that has shown a tendency to liquefaction or inundation or where the geomorphology The practical risk is, of course, that in coming to has changed; some building materials and processes terms with the disaster, the planning and consent that have been approved under the building code system grinds to an effective halt for a long period may have failed under the stresses of the quake and of time while authorities assess the consequences of require review; the city council may wish to limit the earthquake and try to plan for and administer the certain land uses permitted under its district plan future reconstruction phase. The real problems for following the practical experiences and lessons the community in relation to the existing legislation arising from examination of the disaster areas. are that it was not drafted to cope with an emergency situation and it has not been developed to operate under the conditions that will inevitably prevail in Need to review district plans the aftermath of a severe seismic movement. In particular, it is probable that new earthquake fault lines may have emerged. It may become necessary The current environmental legislation places a heavy for the local authority to review sections of the emphasis on a consultative process, but the enor- district plan and this will inevitably bring about mous problems of meeting the reconstruction disputes, hearings and appeals. Some properties may requirements of a devastated city within a reasonable no longer be considered appropriate sites for certain period will not allow us to enjoy consultative replacement structures. Many of the “heritage” procedures. buildings and environments may have been destroyed or severely damaged. Most are constructed One could imagine that everyone will be calling for in materials or to seismic standards that do not fully immediate action: central and local government, conform with current code requirements or exist in private property owners and the community gener-

166 John E Feast ally, but rapid action is considered by many com- (d) validating the actions of public officers done in mentators to be impossible under the RMA. good faith; (i) validating and authorising the erection of Recovery and rebuilding under current temporary buildings; legislation (q) the control of building operations, and in particu- Background lar, authorising borough councils [now called “territorial authorities”] to issue building permits It should be reiterated that while this paper is on the on such terms and conditions as they think fit; practical difficulties of rebuilding the city under the and current legislation, the RMA has been of limited practical effect or consequence thus far for most (w)modifying the provisions of the Town Planning TAs because none has a district plan actually in full Act 1926 [the planning and building control effect, notwithstanding the fact that the legislation legislation then current]. was enacted nearly four years ago. A district plan is Under this Act, a committee was appointed and defined as being an “operative plan” approved by authorised to act to administer the powers of the the TA under the First Schedule to the BA. territorial authorities under Section 64. The Act also Neither the BA nor the RMA appear to have provi- provided funding for rehabilitation, some protection sion for circumventing the procedures for the for mortgagors and other borrowers, relief from consent and consultation required to rapidly rebuild taxes for a period and empowered the Governor- much of the capital city once the emergency itself General: has passed. The Civil Defence Act applies only to ...to make such regulations as he deems emergency situations and is really only appropriate necessary, having regard to the exigencies of in the immediate aftermath of the event. It is obvious the Hawkes Bay earthquake and the condi- that a broader power will be required to truncate tions arising therefrom, for the purpose of administrative procedures and requirements over a validating, authorizing, or prohibiting any longer period of time until the city returns to some act (whether of commission or omission) semblance of “normality”. thing, or proceeding. (S66) The 1931 Napier earthquake Wellington and the Wairarapa suffered the conse- Current situation: Prospects for central quences of two serious quakes, in 1848 and 1855, government intervention which seriously reduced citizens’ confidence. Many Today, the Governor-General has powers under the early settlers left the area following the latter. These Local Government Act 1974 to appoint a “Commis- earthquakes were followed in 1894 and 1904 by two sioner for Disaster Recovery” (S692B of that Act) if others that also caused considerable damage. there is a state of civil emergency or the local authority is unable to exercise its powers, functions However, the best example of the recovery process and duties. from the consequences of a devastating earthquake in modern times was the Napier earthquake, which More generally, the Governor-General can appoint a occurred on 3 February 1931 and caused significant Commissioner to exercise the powers of a local loss of life and severe damage to a major metropoli- council where the council refuses to act or asks the tan area. Governor-General to do so (S721).

The actions that followed that event will, in my Notwithstanding an appointment under the Local opinion, be likely to be adopted in basic format Government Act 1974, it is my view that special should the subject Wellington earthquake actually legislation would still be needed to vary the proc- take place. esses under which the territorial authority grants resource and building consents. On 28 April 1931, Parliament enacted the Hawkes Bay Earthquake Act 1931. The Act provided wide powers of regulation in relation to, among other things, in S66(1):

167 Wellington After the Quake

Recent emergency: The Auckland water legislation. While it cannot be disputed that there is crisis criticism of the existing planning law particularly, The only situation in New Zealand since the intro- one should not expect standard rules to operate duction of the RMA and the BA in 1991 which under emergency conditions. might give some indication of how central government might react in an event such as the Wellington Review of material and process region earthquake was the relatively minor emer- performance gency created by the recent water shortage in It was a further view that some design elements and Auckland in 1994. materials presently approved by the Building Industry Authority for use in construction may On 14 July 1994, the Watercare Services Ltd require specification review and that an urgent (Auckland Emergency Water Supply) Bill, a private response suspending approval for the use of certain members bill was introduced to Parliament on the products and processes that may have shown a basis of the urgency of the situation and the number tendency to fail under seismic conditions will be of local authorities involved (Hon Simon Upton and required until that review has been completed. Hon John Banks, 1994). The Legislative Analyst concluded from parliamentary debate (Ryan, 1994) The New Zealand Building Code states how a that: building must perform to ensure that health, safety and amenity needs of people, protec- Normal processes for consents under various tion of other property from damage and statutes and for negotiations ... could extend energy efficiency requirements are satisfied. a start on the project from 2-3 months to 2 years. (Building Industry Authority, 1991)

Central government was clearly prepared to enact There will no doubt be concern expressed by emergency legislation to alleviate this community construction consultants, especially architects and problem had the rains not come before Parliament structural engineers, following the widespread completed its legislative process. damage to some modern structures after the earthquake. Some design criteria may be changed and designers may have to further review requirements The prospect is special emergency to meet the performance-based code, which will legislation almost certainly have to be reviewed with the For an event such as the subject earthquake, which hindsight of actual rather than design performance will affect much of central New Zealand, it is almost results. What may have been considered adequate inevitable that central government will play a major prior to the quake may be considered quite inappro- role and urgently pass empowering legislation to priate following it. deal with the calamity. It is the view of most leading players in the wider construction and planning From the viewpoint of the TAs and their district industry consulted for the preparation of this paper plans then operative or under consideration, it will that in such an event it will become necessary to be necessary to review objectives and policies to “make the rules work, or change them”. Existing reflect changes that may become necessary or legislation, which is not designed to cope with an desirable following the earthquake. From a practical emergency situation, may have to be suspended or a viewpoint, it may become necessary to “ring fence” moratorium imposed for a term. a problem that has become apparent to enable planners and building inspectors to focus on those It was a widely held view of people consulted that priority areas of the city and environs that can be the consent procedures of the RMA and some returned to normality first. aspects of the BA will not operate effectively under the conditions envisaged. While there may in effect be a practical moratorium on work other than the restoration of basic services However, once there is sufficient political momen- in the initial phases, it will be important to clear tum, the fact that the existing rules do not work will those parts of the affected areas for reconstruction at not matter. They will be changed to meet the the earliest possible time. This may well require the exigencies of the situation. This is not seen as being appointment of additional TA officers, perhaps fatal to the long-term prospects for the existing

168 John E Feast seconded from other local authorities and the • The Chief Executive, New Zealand Master professions acting as agents for the TAs affected. Builders Federation • The Director, New Zealand Contractors Federa- Conclusion tion Inc. It is my view that the initial response to the disaster •Eric Sherburd, Charted Loss Adjuster will be in terms of the Civil Defence Act 1983. Once the emergency phase has passed, it is likely that References territorial authorities will wish to suspend all or parts of their district plans and many of the procedures Barker, W H. 1992. “The promise remains”. in “The under current planning legislation. A commissioner RMA 1991 reviewed: Visionary document or or committee will be appointed to oversee the early tedious tome? Five views of the working model”. rebuilding of the city under the Local Government Recycle Today p. 341. Act 1974 or will be empowered under specific enabling legislation enacted to meet the exigencies Building Industry Authority. 1991. “Acceptable of the actual disaster. Because Wellington City’s TA solutions”. Building Industry Authority guide no. 4 has gone some way to prepare for such an emer- to The Building Act 1991. gency and continues to develop a response plan, its Cameron, R Perry. 1992. A Constructive Guide to qualified personnel will no doubt be co-opted to the New Zealand Building Act. Wellington: Depart- serve. However, because there will be many TAs ment of Internal Affairs. p. vii. affected and because of the seriousness of the disaster, central government will almost certainly Department of Internal Affairs. 1992. A Constructive intervene at an early stage. Guide to the New Zealand Building Act. p. 28. It is considered by most people interviewed as Ministry for the Environment. 1991a. Resource background for this paper that the current planning management: Guide to the Act. Wellington: Ministry and construction requirements will not operate for the Environment. p. 3. effectively in such a situation. It was equally their view that if the current law cannot work, there will Ministry for the Environment. 1991b. Resource be the political focus and pressure to see that it will management information sheet 1, Ministry for the be changed for something more appropriate for the Environment, p.1. challenge of reconstruction following a natural disaster in New Zealand. Ministry for the Environment. 1991c. Resource management information sheet 2, Ministry for the Acknowledgements Environment, pp. 1-2.

During the preparation of this paper, the author Simpson Grierson Butler White. 1994. “The Wel- interviewed or discussed matters contained herein lington City Proposed District Plan”. Client newslet- with a number of people who have an interest in ter, Simpson Grierson Butler White. planning and construction. In particular, the author acknowledges the contributions of the following and Ryan, Des. 1994. Bills Digest Service, 22 July. all others who have assisted with opinions and Wellington: Parliamentary Library. comments: •Ian Athfield, Athfield Architects Upton, Hon Simon and Hon John Banks. 1994. Parliamentary debates, vol. 539, 16 July 1994. •Brent Player, Tse Group Ltd, Architects, Engi- neers and Surveyors • Jim Wiltshire and Mike Scannell, Partners, Simpson Grierson Butler White, Solicitors • The Director and Staff, Wellington City Emer- gency Management Office • Chief Building Inspector, Wellington City Council

169 Wellington After the Quake

170 Discussion Legislation

eicester Steven (Earthquake Commission) asked if any difficulty was envisaged with L the Rating Act following a major earthquake. John Feast said that valuers he had spoken to believed that valuations would increase.

In reply to Kevin O’Kane (Ministry of Civil De- fence), John Feast said that he saw the need for the Ministry of Civil Defence to have special powers during the reconstruction phase as well as the response phase.

Peter Milne (Power Direct) commented that the Health and Safety Act was producing some unantici- pated problems. John Feast said that he had no expertise on this.

Tony Lanigan (A G Lanigan and Associates, Auckland) asked what specifically enactment of special legislation would achieve. In particular, he would not like to see standards for repair compromised. John Feast replied that the present legislation would not be adequate for a city in chaos. Special legislation would allow local authorities to give special permits and might only allow appeals from people with an interest in the property. He said that the problem to avoid is to hold up all building construction work while standards are reviewed for certain buildings that may not have performed well. Instead the problem could be put aside while other work can proceed. Trevor Roberts (Earthquake Commission) commented that businesses would need to get moving again after the disaster, but it would stop them if some legal requirements were rigidly enforced. The law was not designed to cope with the post-disaster phase and needed to be massaged to deal with the practicalities of the situation.

In response to a remark that there were no provisions for level of repair and that there had been a hiatus of several months while outline regulations for repair were defined, John Feast said that all buildings in Wellington have been assessed, and time frames have been laid down for bringing them up to the required structural standard for earthquake resistance.

171 Wellington After the Quake

172 Wira Gardiner

Social Aspects of Recovery 1

173 Wellington After the Quake

174 Wira Gardiner

Earthquakes: A Maori dimension

Wira Gardiner

Chief Executive, Te Puni Kokiri (Ministry of Maori Development), Wellington

Ruaumoko, the God of earthquakes, is no stranger to Maori. His appearance, manifested in the physical upheaval of the earth, has been part of the mythology and life of Maori. The strength of Maori society has traditionally been underpinned by the principle of collective responsibility. The whanau, or family unit, is the building block of Maori society, and the concepts of care for the extended family, charity, and help for others have been key strengths in the development of Maori. While decades of social change, including mass migration from rural areas to the cities, increasing levels of unemployment, and greater risk from economic restructuring, have seen Maori suffer from the rigours of modern Western society, they have retained a remarkable resilience to disaster.

There are approximately 42,000 Maori living in the greater Wellington area. They come from many different tribes, for example members of the Ngati Porou tribe, whose ancestral home is the East Coast of the North Island, number 10,000. Their personal response to disaster will inevitably spread to their relations in Wellington and further afield. The bonds of whakapapa (kinship) will sustain them in the period after the quake. Collectively, Maori response will centre on the marae in the Wellington area, with key points being the marae at Wainuiomata, Porirua, and Island Bay as well as elsewhere. These focal points could form the basis for catering for many hundreds of people. It is here that Maori in their largest numbers can be reached by the social services after the quake.

Introduction Ruaumoko, god of earthquakes E nga waka, to the many canoes that have borne you Ko Ruaumoko e ngunguru nei! Au, au, aue ha hei! to this place; nga mana, to the many distinguished — It is Ruaumoko that is rumbling. These are the guests; e nga reo, to the many voices that have opening lines of a famous haka. The haka, per- gathered here today; o nga hau e wha, from the four formed in a fierce and highly agitated manner, pays winds; tena koutou, greetings; tena koutou, greet- tribute to the god of earthquakes, Ruaumoko. It tells ings; tena koutou katoa; greetings to you all. Mauria of rumbling, subterranean activity and the enormous mai nga mate i runga i ou koutou pokohiwi; trans- pent-up energy of the god as he roams under the port with you to this place the recent bereavements earth, seeking fissures to leap out into the open air, that you carry. Na koutou i tangi; you have grieved either by way of volcanic eruptions or by a crum- for the loss of your loved ones; na tatou katoa, and pling of the earth. we join with you in your sorrow. Me ki penei, let us now say; kua ea, we have completed our tribute to Ruaumoko was one of the approximately 70 gods the dead. Ka huri inaianei, let us now turn, kia tatou and demi-gods of the Maori world. Of the 70 that te hungaora, to us the living. made up the pantheon of ancestral gods he was last in order of seniority. His lack of seniority had Although it is now ten years since I left the job of nothing to do with his lack of power. Rather it is to national director of civil defence, I have not forgot- do with the fact that he was the last of the gods to be ten the challenges that faced us then and still remain born. with us now. I pay a tribute to the professional manner in which you continue to tackle the extraor- In the beginning was darkness, a time of nothing- dinarily vexing area of public safety. I applaud ness. He Po. He Po. He Po. particularly the initiative of the Earthquake Commis- sion in bringing us together today to address these The earth mother, Papatuanuku, and the sky father, matters. Rangi, lay entwined, and their offspring lay between them in the aeons of darkness. After aeons, the It is my privilege today to talk to you about one of querulous offspring of Rangi and Papatuanuku got the more troublesome of my ancestors — the god of restless. Led by one of the senior brothers, Tane, earthquakes, Ruaumoko!

175 Wellington After the Quake they decided to revolt and to separate their parents Maui, which had already been ravished by the so that they could breathe air and see the light. exuberance of Ruaumoko. Volcanic cones were visible evidence of his work. The changing shapes of The Herculean struggles that ensued saw the broth- the landscape, particularly in the central region, were ers finally succeed in wrenching apart their mother a less visible sign of his efforts to twist the earth into and father. As the sky father, Rangi, was pushed rumpled shapes. screaming in anguish to his final resting place above, the earth mother, Papatuanuku, lay battered and The damage to those early settlers and the succeed- exhausted. ing generations was relatively minimal. The scattered villages, the relatively sparse populations Clinging to the breast of earth mother was her last (estimated at 200,000 to 300,000 prior to the arrival baby. This was Ruaumoko. While his brothers went of Cook) and the unsophisticated type of housing on to become the gods of forests, seas, winds, etc., construction would suggest that our ancestors fared he opted to remain with his mother and remained reasonably well and were able to live with the embedded in the earth. tantrums of Ruaumoko.

As he grew, his abundant energies found expression It might also suggest that perhaps the 1-in-1000 year in roaming underground, breaking out from time to type of earthquake might be nearer than we think. time to remind his brothers that he was not to be forgotten. In many ways he was to become more Characteristics powerful than they; striking at will and destroying everything in the path of his energies. He has To understand the potential behaviour patterns of become their nemesis, a constant reminder of what modern Maori living in a city like Wellington, we they had done to Rangi and Papa. need to look closely at the main characteristics of Maori society. Although in recent years the tradi- And last week, no doubt as part of the reminder tional behaviour patterns of Maori have been notice for this conference, he gave us a relatively adapted and moulded by living in a complex urban gentle nudge to let us know that he knew that we environment, it is nonetheless true to say that were going to be talking about him! significant traces still remain.

Whakapapa. The connecting root of Maori society is Scope of presentation whakapapa or genealogy. In European society when In this paper, I want to firstly share with you the people meet, the question most asked is: “ What do earliest experiences of the first settlers in Aotearoa. you do?” This question is typical of a society which Secondly, I will brief you on the characteristics of values the individual and places a premium on Maori society that make it distinct from the domi- individual effort. In Maori society greetings are nant cultural group — Pakeha society. Thirdly, I will generally followed by, “Where are you from?” This brief you on the distribution of the Maori population is shorthand for what is your whakapapa? It is in Wellington and identify the main cultural centres through this connective question that Maori derive a — the marae — in the region. Finally, I will attempt sense of belonging to a wider family group. The to sketch out a scenario response to a major earth- question reflects the collective nature of Maori quake here in Wellington. society.

Maori society Whanau/hapu/iwi. The extended family played a crucial role in traditional Maori society. Multi- Arrival in Aotearoa generational family units were the norm. Extended families grouped together from time to time into Over a thousand years ago, our ancestors drove out hapu and, where necessary for large-scale economic of the Pacific into uncharted waters and the chal- or war effort, the hapu banded together to form iwi. lenges that lay far to the south in the southern Although many families now live in a solo-parent oceans. They came upon Aotearoa, the land of the relationship, there is still present the connection to long white cloud. the wider family.

As those first explorers beached their canoe on these The marae. The marae has always been the physical virgin shores, they came upon a land, fished up by manifestation of the collective nature of Maori

176 Wira Gardiner society. Living quarters clustered around a central In a recent study (Wellington Regional Council-Hutt meeting place evolved over the centuries. Today we Valley Control Scheme Review 1990) of the Hutt have approximately 1000 marae throughout the Valley area, it was shown that Maori tended to live country. Typically, the marae consists of a tipuna on the southern side of the Hutt river in the follow- whare, which represents a well-known ancestor; in ing localities: north Upper Hutt, Stokes Valley, front of the tipuna whare is a space called the marae Naenae, Waiwhetu, Moera and Petone. Only one atea (it is the place where the formal speeches of community (Manor Park) on the northern side of the welcome take place); and not far from the tipuna Hutt River had sizeable numbers of Maori. whare is the whare kai (the dining hall). Marae operate on a voluntary system, and whenever a The marae in the region. There are 11 marae in the major function takes place it is the responsibility of region. They range from traditionally constructed the marae committee and the local people to look carved marae like Ngati Toarangatira’s marae at after the guests — feed them and ensure that they Takapuwahia to modern decorated marae at Island are accommodated overnight. Bay. There two marae within the confines of Wellington city. One of these is the large multi-tribal Maori in the Wellington region marae of Pipitea and the other, Te Herenga Waka, is based at Victoria University. These marae have the Impact of post-World War II urban drift. After the capacity to sleep and feed hundreds of people, and Second World War many thousands of Maori moved with the addition of tarpaulins can sleep and feed from the rural areas to urban centres like Wellington. thousands. For tribes like Ngati Porou of the East Coast there are now approximately 6000 members, or more than The Wellington earthquake double the numbers living in the home area. Maori who moved to urban areas like Wellington took up A scenario largely blue collar jobs in the railways, the post and telegraph departments, and local councils. The vast When the major Wellington earthquake strikes there majority of Maori working in Wellington still tend will be, as you know, considerable dislocation. One to work in those areas. scenario has the central business district in ruins. It will be difficult to travel between suburbs because of The people. There are approximately 40,000 Maori the massive disruption to roads and rail. Many living in the Wellington region. The majority of hundreds — perhaps thousands — have been killed. these people may be described as ra waho — people Many thousands of houses have been destroyed or who have come to the region over the last few are uninhabitable. It will take days and perhaps decades, and particularly during the 1950s and weeks to re-institute basic services. 1960s. In the days following the earthquake, there will be a The local tangata whenua are Te Ati Awa, based need for communities to fall back on their own around the Lower Hutt area, who have strong resilience and local resources to weather the initial kinship links to Taranaki, and Ngati Toarangatira, period of rescue and recovery until a massive based around the Porirua district. national and perhaps even international rescue mission can be mounted and sustained. It is likely that most of these people belong to social networks of kin, friends and neighbours. In the short In the first few days, there will be a need to rescue term, and where the disaster is confined, these survivors and stabilise the situation. In the following networks will be very useful in the rescue and days and weeks, there will be a need to recover basic recovery phase. However, if the disaster is extensive services and provide medium-term help for the and the damage cataclysmic, then even these strong homeless and needy. There is likely to be a longer- community networks could fracture. term need for redeployment of perhaps thousands of citizens outside of the area for periods of months Geographic location. The largest concentrations of while the city is re-established. Maori are based in the northern city of Porirua, the city of Lower Hutt, and suburbs like Wainuiomata. How Maori react to each of these scenarios will The majority live in state houses and, if they have depend on their state of preparedness and their work, it is in the lower level of the economic strata. access to resources. Planners and rescuers should take a number of factors into consideration.

177 Wellington After the Quake

Planning normal course of events might be expected to cater It would be useful for the planners in the Ministry of for hundreds will possibly cater for thousands. Civil Defence, Wellington regional and city councils One of the consequences of living on a marae is that in the greater Wellington region to study the impacts people become ‘fixed’ to the marae and are reluctant of the Edgecumbe earthquake on the Maori commu- to leave. Should it be necessary for them to be nity. evacuated to community halls or school facilities, It is important for planners to make provisions now then they will probably be able to fit reasonably well to identify where Maori are concentrated, where into the collective arrangements that such a move they work and what their likely reactions are to would entail. disaster. Consultation via the marae and Maori A consideration for civil defence planners will be organisations like the New Zealand Maori Council, what to do with the dead. Since so many Maori who the Maori Women’s Welfare League, and the Maori die in Wellington are returned to their home areas, Wardens Association is essential. When disaster where they may be mourned and grieved over by strikes, it is better for Maori to deal with Maori. The their relations, this could pose major problem, introduction of task force teams from out of the area especially if the death toll is so high that mass burial with no Maori members might also pose difficulties, arrangements might be necessary. Some degree of and, therefore, planning should ensure that, should sensitivity will need to be accorded to this issue. these be necessary, wherever possible local Maori liaison officers should accompany them. Longer-term arrangements Post-impact period Should it be necessary to evacuate people out of the capital for periods of up to several months, then it Because so many Maori live at the lower end of the will probably be a lot easier to move Maori, as they economic scale, they are least likely to have stocks will have a turangawaewae elsewhere in the country. of food or the basic civil defence equipment in their For example, the Ngati Porou people of the East homes. Moreover, if the quake strikes during work Coast have available to them up to 48 habitable hours, there is a high likelihood that many will be at marae that could cater for their own people who home, given the relatively large numbers of unem- might have to evacuate from Wellington. ployed. Interestingly enough, it might be argued that, because they have been able to survive on the Moreover, since it might be a considerable time ‘breadline’ for long periods, they might be reason- before the capital can be re-established, the plight of ably well prepared to stand the immediate depriva- those who have been evacuated might well be easier tion of essential services and other quality-of-life to manage for Maori than others. The majority of items. Maori living in Wellington occupy rented premises and, therefore, do not have a cultural tie to the house However, if major physical damage including large- or its surrounds. It might be better for the govern- scale loss of life and serious wounding occurs, there ment to provide incentives for these people not to might be a need for rescue teams to focus on con- return to Wellington. centrations of Maori families, as there are not likely to be stocks or reserves of essential medicines or pharmaceutical drugs available in these households. Conclusions Where damage to physical property is heavy and The challenge for civil defence authorities is clear. loss of life is minimal it is likely that Maori families In the time-honoured tradition, I wish to lay the will collect together and make the best efforts to following wero (challenges) at your feet. When survive the first few hours and days after the shock dealing with Maori it is helpful to: of the quake. • accurately establish their demographics;

Medium-term arrangements • understand their point of view, especially cultural; In the days and weeks following the quake, it is likely that Maori who need shelter will try to gather •establish linkages before the earthquake, at at their local marae. The marae facilities will need to marae, etc.; be significantly enhanced, as facilities that in the

178 Wira Gardiner

•use Maori liaison officers as part of the rescue and recovery; and • when dealing with Maori keep in the forefront of your minds this whakatauaki (proverb):

He aha te mea nui o te ao, maku e ki, he tangata, he tangata, he tangata,

If one asks what is the most important thing in the world, it is people, people, people.

179 Wellington After the Quake

180 Rachel Scott

Social Aspects of Recovery 2

181 Wellington After the Quake

182 Rachel Scott

Coordination and accessibility of post-disaster counselling and community support services

Rachel Scott

Wellington Emergency Management Office, Wellington City Council

In New Zealand’s current social and economic climate, providers of counselling and community support services are faced with excessive demands on resources. Over the past few years, the use of these services has steadily grown while the funding available has diminished.

The post-disaster context places further demands on community support services that are likely to exhaust existing physical and human resources. The dynamic period in the community’s recovery process requires prior planning that is comprehensive and flexible. Decisions need to be made quickly and actions that are to be effective cannot usually be taken without adequate preparation. Therefore, planning and coordination prior to impact are vital to ensure support services are provided to those most in need by making efficient use of existing community resources.

In Wellington city, a process to ensure that services will continue to be provided after a large-scale emergency has already begun. This paper discusses this process in the light of the population base of Wellington and the existing coordination and accessibility of counselling and community services within the city.

Introduction social services while having limited resources and infrastructure. New Zealand’s experience with major disasters is limited at best. Since the 1931 Napier earthquake, Previous disasters, both here and overseas, have there has not been a significant hazard impact in any shown that effective recovery occurs when individu- large urban area. Yet the emergency response and als and communities are able to exercise a high recovery in that earlier event is still being used as a degree of self-determination, contribute to the yardstick for our ability to cope in the nineties. It is management of the recovery process and participate no more appropriate to compare Wellington 1994 in deciding what assistance measures are made with Napier 1931 for disasters than it is to compare available. This is best achieved by using, where it for traffic, employment or any other social condi- possible, those agencies and personnel already tion. established in the city. This helps the community to retain control and coordination of recovery activities Disasters are social events and relate to the society and helps encourage the return of normal routines. affected, not just the location or the type of hazard impact. The time has come to reassess our performance measures and start learning from our mistakes. Community support agencies in We need to take heed of the lessons learned, both Wellington here and overseas, and become more proactive in As with most New Zealand cities, Wellington has a dealing with the effects of disasters — both short- large array of community-based organisations that and long-term. provide services to targeted sections of the population. The services vary from counselling, informa- Rebuilding the community is not just about the tion and advice, to more physical assistance such as restoration of utilities and motorways. Recovery is accommodation, employment, financial aid and the about restoring the community’s sense of normality. provision of health services. Thus, social support networks and services are an important factor in achieving this. Like the physical The services are provided, in part, by the dozens of reconstruction following impact, social services will umbrella organisations within the city. Many are also need time to recover. Furthermore, as with government-based, such as the major health provid- physical reconstruction, there is a higher demand for ers (i.e. Capital Coast Health, CCH), while others

183 Wellington After the Quake have been established by specific interest groups to not a viable option. The people they serve are more meet distinctive needs. These groups include support often those who can not afford to pay for the serv- and advocacy networks for the elderly (Age Con- ices being offered. cern), for people with disabilities (Disabled Persons Assembly) and for specific ethnic minority groups By the nature of the work undertaken by community (e.g. Pacific Island Resource Centre). In addition, a support agencies, these organisations generally have range of smaller agencies exist in supporting roles well established networks and routines with other by supplementing services and addressing individual service providers. However, there are a number of concerns (CCH and the Schizophrenia Fellowship, small and diverse agencies throughout the city that 1994; De Jouz, 1993; Wellington Consumer Health are not included under any major umbrella group Forum, 1994; WCC, 1993a). and, therefore, do not have the same access to resources. These agencies often overlap with the The social support system in New Zealand has type of services offered and frequently compete with grown out of the now outmoded welfare state model. each other for funding and support. Consequently, However, much of the underlying philosophy of the while many services are duplicated, there are other welfare state is still evident in the range of services needs within the community that are not being offered and in their delivery (Britton et al., 1992; adequately met. Trlin, 1977). The services, generally speaking, cover six main areas of concern: The difficulties these agencies face will normally be exacerbated by a disaster. The disruption to routine • health and welfare; and resources, especially to organisations reliant on • accommodation; volunteers, is likely to lower their level of service at a time when demand is peaking. The interdepend- • employment; ency of these organisations, both on other commu- • financial assistance; nity services and on the physical infrastructure (for • education; and example, public transport, telephones, power) make them particularly vulnerable to a hazard impact, • personal support. again increasing the need while decreasing the resource. Many of the services provided are required by law and are funded by central government. Many have One area of particular concern is counselling. developed out of larger government organisations to Outpatient services, particularly in the mental health fill a certain niche in the community, while others area, are already stretched to capacity. Major social have been established by the community itself to service providers, such as Social Welfare, Health cater for unmet needs. and Justice Departments, all have their own counselling services. Their funding is targeted to those most Although the need for community support services at risk and unable to pay for themselves. Following a has increased and a broader range of services is now disaster, additional funding is likely to be required to offered, the resources available to fund these meet the public expectation for counselling services. services have generally remained static. Thus, the Central government, through the Central Regional limited funding available has to be shared equitably Health Authority, would need to fill the gap between among the agencies most in need and, as such, is post-impact demand for health services by purchas- often a source of contention among providers of ing from private counselling services. community support services. Those without direct financial assistance from the government have to Following a major hazard impact, limited resources fund their services from the community via user- are likely to be more in demand. It is important from pays charges, grants, donations or appeals. an emergency management perspective that agencies work together in the pre-disaster phase so that The lack of available funding has impacted dramati- community needs are addressed post-impact. This cally on how various services have been provided. A also extends to the integration of the physical large majority of community services are provided recovery into the planning of social service provi- by volunteer groups and are dependent on commu- sion. People often use a continuum of services nity goodwill for resources and support. For many following a disaster. Therefore, providers of com- agencies, the introduction of a user-pays system is munity services should promote continuity of care

184 Rachel Scott and a coordinated approach to care across the full Education range of counselling and community support Compared with national figures, Wellington’s services. population in 1991 was more educated than New Zealand as a whole. Only 23 percent of the city’s The Wellington situation population did not have any school qualification, compared with 38.1 percent for other urban centres The cost of a major disaster in relative terms is much and 40.7 percent nationally. Furthermore, 48.8 greater for those groups already dependent on percent of city residents had at least one tertiary government and community organisations for qualification. This percentage is much lower for accommodation, social or financial assistance. These other urban centres, at 37.1 percent, and nationally, groups, often consisting of ethnic minorities, the at 35.7 percent. The differences in education levels unemployed, the elderly and people with disabilities, are also apparent when comparing sections of the generally have less savings than the dominant city, with lower education levels concentrated in population group, have little or no insurance and areas of known risk from hazards. more often than not are in the lower income bracket, leaving them vulnerable to long-term financial difficulties following disasters. Employment At the 1991 census, 179,631 persons were in Often these groups live in houses vulnerable to employment in the Wellington region, while 17,766 certain types of disasters, such as earthquakes or were unemployed and seeking work. Although fire, frequently clustered in areas of high risk. unemployment in the city was low compared to the Furthermore, these groups do not have the financial national average (9 percent compared with a national resources to increase their preparedness, either average of 13.7 percent), a significant number of through storing emergency supplies or by taking jobs in the city were provided by a small number of preventative steps to reduce their exposure to known organisations. It should also be realised that a large hazards (Britton and Lindsay, forthcoming; Rahimi, proportion of Wellington’s workforce commutes 1993; Tierney et al., 1987). into the city each workday. A growing proportion of Wellington city’s popula- The major employers in Wellington in 1991 were tion is vulnerable to the effects of disasters. There central government and some large corporate head are currently about 150,300 people living in the city offices, all with a national (or even international) (Department of Statistics, 1992a). About 12 percent focus. The government alone provided over 13,000 of the population is over 60 years of age, and the jobs in the city. Wellington City Council, Welling- population is expected to age steadily over the next ton Hospital and Victoria University of Wellington 25 years. With age comes decreased income, also provided large numbers of jobs, both permanent mobility and health, all of which contribute to higher and contract positions. The major trading banks vulnerability. provided another 5000 jobs. Government and head offices also provided a significant number of jobs Between 1986 and 1991, the New Zealand-born indirectly because a host of smaller business services population in Wellington rose by only 615, com- have established themselves in Wellington to cater pared with a 4899 increase in the overseas-born. to these larger organisations (WCC, 1993b; WCC, About 9 percent of Wellington city’s 1991 popula- 1994a). tion lived overseas in 1986, compared with a national average of only 5 percent. Wellington has a large percentage of Pacific Islanders and has twice Income the national proportions of ethnic Chinese and The median income for persons aged 15 years and Indians, as well as a strong presence from smaller over in Wellington city was $17,513 per year, the ethnic groups. For many of these people, English is a highest in New Zealand (Department of Statistics, second language, making pre-event preparedness 1992a). However, large numbers of people in the information difficult to access and hindering post- city were dependent on the Department of Social event information distribution (Kolarik, 1993). Welfare for financial assistance.

The number of social welfare benefits provided to people in Wellington city continued to fall over the

185 Wellington After the Quake

12 months to September 1994, but at a slower rate vulnerability of lower socio-economic groups has than nationally. The number of people receiving been supported in overseas examples (Britton and unemployment benefits in Wellington city fell by 7 Lindsay, forthcoming). percent (from 5848 to 5435) over the same period. This is well below the 12 percent fall recorded The social impact of disasters nationally. During the same year, the number of persons in the city receiving domestic purposes, Housing sickness and invalids benefits increased by 8 Reading the recovery reports from many of New percent, compared with a 5 percent increase nation- Zealand’s recent disaster experiences, one can be ally (WCC, 1994b). forgiven for assuming that people had no major Consistent with the drop in employment-related housing problems. Little information is available on benefits, there was a reduction in the number of the long-term rehousing of evacuees following New referrals for repeat applicants for budgeting advice Zealand disasters, and what is available tends to be and a fall in the demand for food parcels, down by 4 largely anecdotal. percent on the previous year. Housing is perhaps the most significant element in recovery to the victim or household (Bolin, 1993) Health and is related to the social class of the victim, with About 10.8 percent of Wellington’s population have wealthier victims more likely to establish new some form of disability, compared with 13.6 percent housing equivalent to, or better than, their pre- for New Zealand (WCC, 1993c). The elderly make disaster residences in terms of size and amenities up a large percentage of this group. (Bolin and Bolton, 1986). The full impact of a disaster is unlikely to be felt in the immediate There has been a decline in visits to general practi- response to a disaster. Housing shortages are more tioners since 1993, due in part to increased costs in likely to be felt after the declaration is terminated, as medical care and prescription charges (Delahunty, people slowly leave emergency accommodation and 1994). Coupled with this was a growth of commu- begin rebuilding their homes and seeking alternative nity health care services. Contracted to the regional long-term accommodation. This was apparent health authority, these groups provided primary following the Southland floods in 1984 (Luketina, health care and health education and promotion 1986). activities to groups who traditionally missed out on services because of cost and accessibility. Social class also affects the speed with which disaster-affected people will return to their homes. Waiting lists at Wellington Hospital rose from 4380 In both the Loma Prieta (1989) and Northridge to 5025 in the year to June 1994, up 14.7 percent for (1994) earthquakes, renters tended to spend longer the year. The year also saw a rise in the demand for periods of time out of their homes. In Wellington, mental health services and community support the high proportion of flats (“non-family house- services in the city, creating extra pressure for staff holds”) and the large numbers of households in the and patients (Delahunty, 1994). lower income brackets will compound the existing housing problems in the city. Housing Wellington City Council is the second largest At the 1991 census, 25.9 percent of private dwell- property owner in New Zealand and the major ings in the Wellington region were rented or leased, provider of low-cost accommodation in the city. the highest proportion of rented dwellings in New However, as with many New Zealand cities, there is Zealand. a shortage of affordable housing for low-income groups and this is likely to be exacerbated following Wellington also has large concentrations of older — any major disaster (French, this conference). This often substandard — housing located in areas of needs to be factored in to any long-term disaster known risk from landslides, ground shaking and housing policies, by including provisions to ensure liquefaction. Compounding this physical risk is a the rebuilding of affordable rental units. social vulnerability issue: many of the city’s low- income groups are also clustered in these areas. The Following the 1994 Northridge earthquake in Los influence of location within urban areas on the Angeles, emergency shelters were open for 34 days.

186 Rachel Scott

After Loma Prieta 1989, Red Cross emergency likely to be spent on technology rather than people shelters had to be kept open for 66 days in Santa (WCC, 1993a). Although this expenditure on Cruz. Even when the facilities were eventually technology has negative implications on employ- closed, 21 families were still staying in one shelter ment, it has positive impacts for community recov- and had to be placed in motels. Following the 1984 ery following disaster. Communications are a vital Southland floods, 1200 houses were damaged, component in the restoration of essential services representing less than 6 percent of the housing stock. (CAE, 1991) and, as such, are important in the Over 3000 people had to be temporarily accommo- recovery of normal social systems and routines. dated, many for six months or more. Damage in this event was estimated at $50 million. Counselling and community mental health

Over short periods, disaster-affected persons can and Social scientists have been unable to reach consen- will put up with minimal facilities. However, if they sus regarding the psychological consequences of are expected to remain in emergency accommoda- disasters (Quarantelli, 1985; Perry and Lindell, tion for some time, disaster-affected persons begin 1978). There is basic agreement, however, that to demand increasingly greater levels of services — disasters are themselves not directly equated with and understandably so. If the Wellington region is stress. Disasters cause changes in social systems, severely impacted, how much can evacuees in this which in turn require system elements to adapt to region expect to receive and what will they be different demands (Perry and Lindell, 1978; Luke- prepared to settle with? tina, 1986).

Quarantelli (1984) found that disasters do not Employment generally result in severe mental health conse- Significant changes to the economic infrastructure quences, whether looked at in the short- or long- following disaster, through service attrition, expan- term. Services are sometimes required, however, sion or consolidation, will have a serious impact on because while the disaster agent may not generate the region’s economic recovery. Previous disasters, psychological problems, the relief effort directed at for example, have shown an increase in trade for the victims may create a situation more damagingly building and hospitality industries, at least temporar- stressful than the actual disaster experience itself ily. Many Wellington organisations are acutely (Ruscoe, 1988). aware that the demand for their services is likely to exceed existing capabilities. Others in the city have A study into social and psychological effects plans in place to enable them to quickly relocate to following the 1984 Southland floods revealed that other centres following a major impact. any psychological problems that appeared following that event were more likely a consequence of the The city’s economy is highly dependent on its floods’ aftermath rather than the flooding itself transport network, with a large daily commuter (Luketina, 1986). Following the floods, there were population and a reliance on limited access routes. widespread claims about serious social and psycho- Approximately 60,000 people enter the city from the logical problems, including a relatively high level of greater Wellington region, mainly by private vehicle marital breakup, behavioural problems in children or rail. Approximately 25,000 residents leave and increased anxiety and depression in adults. Wellington city for work in the Hutt Valley or the These claims were not supported by most of the Porirua Basin (WCC, 1994a). The disruption likely relief workers. However, there is very little empiri- to the transport network within the region is likely to cal evidence available to confirm or refute these have longer-term effects on the city’s economy. claims. Furthermore, any additional stress on this system will intensify existing problems. That is not to say that there is no need for mental health services following a major hazard impact. Wellington has a slightly greater proportion of jobs Social research indicates that any dramatic change in in communications than the national average. Local the social structure of a community does have employment in the industry has been under severe negative consequences on the population. These pressure over the last six years due to restructuring effects are particularly marked if the event causing and increased competition. High levels of invest- change has been sudden and unexpected, for exam- ment are expected in the future, but the money is ple, in areas where the loss of the major employer

187 Wellington After the Quake has caused a sharp rise in unemployment levels, rectly transferred back to “Civil Defence”, i.e. for there has been a corresponding increase in many transport, food and accommodation. negative social, psychological and financial indicators (Peck, 1985). In towns where additional social The draft Wellington City Disaster Recovery Plan- support networks and initiatives have been encour- ning Guide (WCC, 1994c) provides a framework aged, the long-term effects on the community have for, and describes the responsibilities associated been far more positive (Boswell, 1994; Peck, 1985). with, effective disaster recovery operations. It also sets out the basic principles for post-disaster actions. It is, therefore, appropriate for emergency managers It has been produced to give assistance to those to plan for the provision of increased social support working in the area of disaster recovery and to services, including mental health, just as planning is ensure a coordinated approach to the restoration and undertaken for the possible loss of utilities, transport provision of post-impact services. In this context, it and communication links. is the vehicle that coordinates everyone involved in the disaster recovery process. Making mental health an element in the disaster preparedness process will ensure better post-disaster The guide, sent initially to about 80 agencies, has coordination (Tierney, 1989). Any post-disaster prompted them to look at their own internal planning mental health interventions should build upon and to address the need for strengthened external community strengths, mobilising and incorporating relationships. Without pre-planning, the time needed latent community resources. Disaster mental health by organisations to respond is increased. Financially, programmes should identify and attempt to coordi- the cost to develop and implement post-disaster nate with these supportive groupings, and they programmes after impact is greater and often proves should facilitate the development of mutual-help to be ineffective. networks where they do not already exist. The guide is an ongoing project and the end product The Wellington city approach will become more and more sophisticated over the next few years. The aim is to have a final draft Over the past two years, the Wellington City Disaster Recovery Planning Guide at the end of the Council, through its Emergency Management Office current financial year (June 1995). has being developing a comprehensive disaster recovery programme. This programme is based on a The guide provides guidelines for the major areas of programme undertaken in Los Angeles over the last concern present in the community following a major six years, which resulted in the Los Angeles Recov- hazard impact. The main issues covered in the plan ery and Reconstruction Plan (Los Angeles Emer- are accommodation, economic recovery, information gency Operations Organization, 1994). and advice services, and the ongoing provision of mental and physical health services. It outlines the In March 1994, the Wellington Emergency Manage- general activities required both pre- and post- ment Office (WEMO) invited representatives from disaster to ensure effective coordination of services the lead disaster response and recovery agencies to and resources. WEMO is working with the agencies meet together. The purpose of the meeting was for identified in the planning guide so that all aspects of agencies to assess their ability to fulfil obligations community support are provided for, have appropri- under the Ministry of Civil Defence National Civil ate networks established and are able to adapt to the Defence Plan. Although most were willing to stresses and conditions created following a major undertake these roles at the local level, concerns hazard impact. It is not meant to outstrip existing were raised regarding funding, staffing levels and organisational objectives, responsibilities or struc- the availability of resources. tures, but to build on the skills, resources and networks already available in the community. Furthermore, little internal planning had been undertaken by the majority of agencies present. Conclusions and recommendations Many knew their requirements under the national plan but had little idea how to implement them post- Disasters are social events. The cost and time to impact or how their agency linked in with other rebuild a city is far greater than the obvious costs of agencies in the post-disaster phase. Nor did agencies repairing damaged drains and cables. The hidden appreciate that their obligations could not be indi- costs to the community lie in the provision of long-

188 Rachel Scott term community support services. Accommodation, Britton, S, R Le Heron and E Pawson. 1992. Chang- employment, health and general community wellbe- ing Places in New Zealand: A Geography of Re- ing are all significantly affected following disasters, structuring. Christchurch: New Zealand Geographi- just as they are following any other major disruption cal Society. to the social infrastructure. Capital Coast Health (CCH) and the Schizophrenia Community recovery following disaster consists of Fellowship. 1994. Community Mental Health three interdependent components — social, eco- Directory for the Wellington Region. Wellington: nomic and physical. A major impact on any one Capital Coast Health and the Schizophrenia Fellow- component in the system will have dramatic effects ship. on the other two. For community recovery to be effective, plans must include contingencies for all Centre for Advanced Engineering (CAE). 1991. three elements. To date, New Zealand has not Lifelines in Earthquakes: Wellington Case Study. adequately planned for the long-term social and Project summary. Christchurch: University of economic effects of disasters. Canterbury.

The recent attention awarded to the restoration of De Jouz, M. 1993. A Directory of National Commu- physical utilities has been invaluable in increasing nity Groups in New Zealand. Monograph Series No. our knowledge of disaster reconstruction, but it has 15. Wellington: Department of Internal Affairs. limited value when assessing the long-term social impacts on the community. Emergency management Delahunty, J. 1994. Running Ragged: Health in this country needs to look beyond the emergency Services in Wellington for 1994. Wellington: response phase and examine how the restoration of Wellington Consumer Health Forum. services and facilities affects the population. Department of Statistics. 1992a. 1991 Census of Recovery is a long-term process and one that should Population and Dwellings: Wellington Regional not be taken lightly. Although Wellington has taken Report. Wellington: Department of Statistics. the steps to ensure this process is under way, there is Department of Statistics. 1992b. 1991 Census of still much more work to be done in this area. The Population and Dwellings: Regional Summary. fact that we have already started, however, ensures Wellington: Department of Statistics. that we are in a much better position to control the rebuilding of the city, socially, physically and Eldar, R. 1992. “The needs of elderly persons in economically, when disaster does strike. natural disasters: observations and recommendations”. Disasters 16(4): 355-357. References Kolarik, I G. 1993. “Communication with non- Bolin, R. 1994. Household and Community Recov- English speaking background people in emergen- ery after Earthquakes. Program on Environment and cies”. National Emergency Response. Australian Behavior monograph no. 56, Institute of Behavioural Institute of Emergency Services. Science, University of Colorado. Los Angeles Emergency Operations Organization. Bolin, R and P Bolton. 1986. “Recovery in Nicara- 1994. Recovery and Reconstruction Plan. City of gua and the USA”. International Journal of Mass Los Angeles, Los Angeles, California. Emergencies and Disasters 1(1): 125-144. Luketina, F. 1986. The 1984 Southland Floods. Boswell, K. 1994. Grassroots 11: Community Research report series no.4. Research Section, Development Initiatives at the Grassroots. Welling- Department of Social Welfare. ton: Ministry of Agriculture and Fisheries. Quarantelli, E L. 1984. An Overview of Research on Britton, N and J Lindsay (forthcoming). “Integrating PTSD in Survivors of Disasters. Working paper #72, city planning and emergency preparedness: Some of Disaster Research Center, University of Delaware. the reasons why”. International Journal of Mass Rmergencies and Disasters. Quarantelli, E L. 1985. “An assessment of conflicting views on mental health: the consequences of

189 Wellington After the Quake traumatic events”. In Trauma and its Wake, C R Wellington City Council (WCC). 1994b. Quarterly Figley (ed). New York: Brunner/Mazel. Commentary for Wellington City, Sept 1994. Wellington: Wellington City Council. Parr, A R. 1987. “Disasters and disabled persons: an examination of the safety needs of a neglected Wellington City Council (WCC). 1994c. Draft minority”. Disasters 11(2): 148-159. Disaster Recovery Planning Guide. Wellington: Wellington City Council. Peck, L. 1985. Closedown. A Review of the Litera- ture Pertaining to Industrial Closedowns and Mass Wellington City Council (WCC). 1994d. Transport Redundancies: 1980-1984. Town & Country Strategy. Wellington: Wellington City Council. Directorate, Ministry of Works & Development, Wellington. Wellington Consumer Health Forum. 1994. Welling- ton Community Health Groups. Wellington: Wel- Perry, R W and M K Lindell. 1978. “The psycho- lington Consumer Health Forum. logical consequences of natural disaster: a review of research on American communities”. Mass Emer- gencies 3: 105-115.

Rahimi, M. 1993. “An examination of behaviour and hazards faced by physically disabled persons during the Loma Prieta earthquake”. Natural Hazards 7: 59-82.

Ruscoe, Q. 1988. Walking on Jelly: The Bay of Plenty Earthquake, 1987. Wellington: DSIR Pub- lishing.

Tierney, K J. 1989. “The social and community contexts of disaster”. In Psychological Aspects of Disaster R Gist and B Lubin (eds.). New York: John Wiley and Sons. pp. 11-39.

Tierney, K J, W J Petak and H Hahn. 1987. Disabled Persons and Earthquake Hazards. Institute of Behavioral Science, Boulder, Colorado.

Trlin, A D. 1977. Social Welfare in New Zealand Society. Wellington: Methuen Publications.

Wellington City Council (WCC). 1993a. Community Directory. Wellington: Wellington City Council.

Wellington City Council (WCC). 1993b. City Profile, June 1993. Paper no. 8, Strategic Planning & Policy Division, Wellington City Council.

Wellington City Council (WCC). 1993c. Policy for People with Disabilities. Wellington: Wellington City Council.

Wellington City Council (WCC). 1994a. Suburban Profile, April 1994. Paper no. 15, Strategic Planning & Policy Division, Wellington City Council.

190 Hon Bruce Cliffe

Social aspects of recovery: The response of government agencies

Hon Bruce Cliffe

Associate Minister of Finance

Ladies, gentlemen, international guests; I am here will have been referred to a number of times at this today to represent the New Zealand Government at conference already. this conference. My task is to speak about the way this government envisages its role following a I understand that this earthquake has revived debate disaster — what our job would be “after the quake”. in Japan on whether or not the Japanese capital should be relocated. This argument could well This is a theme close to my heart. Last week, my extend to New Zealand given that our capital knees rattled as my Wellington residence, which straddles a major fault. But the truth is that there according to the title deeds sits right on top of the seems to be no place that is totally safe. Even if we Wellington fault, shuddered and shook for what were to move the government to my own electorate seemed like several minutes, but was in fact only 20 of the North Shore in Auckland, I am told that Kobe seconds. That earthquake, at 5.9 on the Richter is as far from Tokyo as Auckland is from the scale, illustrated graphically why those living in Wellington/Wairarapa faults, and we have volcanos Wellington, living as they do on a major fault, need on the North Shore that may decide to blow at any to be vigilant and prepared should disaster strike. time!

In my speech today, I propose discussing three main There are lessons that New Zealand can learn from themes: Kobe, however. For example, New Zealand industry should study the commercial implications of the • how government sees its role; sudden loss of a major port for an unknown length • how government views the balance of responsi- of time. How many of our local companies have bilities between central government and local back-up plans for a situation of that sort? government and private enterprise and individual owners of assets; Earthquakes are not the only natural disaster that government must consider, although they are — and last, but not least — potentially the most expensive type of disaster, •the strong interest government has in fostering given their ability to disrupt the economy and to among all concerned a better approach to damage property and infrastructure. The government effective risk management. also has to consider the potential impact of floods, storms, volcanic eruptions or bushfires. In fact, Current recovery policies in New Zealand aim at floods have accounted for more than half of the dealing with a range of possible emergency situa- natural disasters which have occurred in New tions. The Ministry of Civil Defence, for example, Zealand communities over the past 30 years. When has prepared a national contingency plan for dealing we look back over the last 150 years, however, it with the immediate response issues resulting from a could be claimed that more people have been killed Wellington earthquake. A plan for ensuring the as a result of volcanic action than by floods or “continuity of government” was renewed at the end earthquakes. of last year. Last year we faced another kind of crisis when our The government’s problem is that estimating risk in largest urban area, Auckland, faced the prospect of situations of low probability but potentially high an urban drought. Local authorities and central consequence is extraordinarily difficult, therefore government had to work together to coordinate a making it difficult to allocate appropriate levels of possible response. A pipeline from the Waikato resources. Nonetheless, no government can afford to River was under consideration. Luckily the weather ignore the issue. Disaster strikes at any time — as changed and the dams filled, but, had this not evidenced by the earthquake near Kobe — which happened, we faced the prospect of a city of a million people going without water.

191 Wellington After the Quake

This country is prone to such natural hazards and shared. Government continues to cover a large this is why government policy reflects the need to be proportion of infrastructural recovery costs. But in able to respond to a wide spectrum of possibilities. doing so, it transfers appropriate responsibility for the recovery as a whole on to those with a direct When a major earthquake occurs in Wellington — interest. The issue is to strike a sensible balance of what would government’s main concerns be? responsibilities between those affected — individuals, businesses, and local, regional and central The government’s initial task would be to ensure governments. that government continued to function effectively from the current parliamentary complex. The first Previously, we in central government were meant to point to note is that the likelihood of damage on a pick up nearly all of the tab after disasters. But that scale that would render the majority of government arrangement was flawed. It provided no incentives buildings unusable is extraordinarily low. The for those affected to manage their assets effectively parliamentary complex is on relatively stable ground (for example, to construct them to good standards, compared to other buildings in Wellington. In maintain them appropriately and to mitigate the addition, the unique circular Beehive, where the risks). executive resides, is thought to be one of the safer buildings in town, while the older Parliament Having government cover the total cost of repair Building is currently undergoing work to strengthen was unnecessarily costly for taxpayers generally and its structure. did not promote the right incentives. During the local body reforms of the late eighties, the Labour As you will all know, other government buildings government at the time sought a better system. It like the State Services Building, the National sought to share the risk between central government Library, the National Archives and the High Court and local authorities. Local authorities are now buildings have all been built with the intention of expected to undertake their own risk management; withstanding a major quake. We can only wait and assuming responsibility for their assets. see if such confidence is well founded. Government does accept, however, that some major Not only has the physical integrity been provided infrastructural assets such as sewage systems and for, but roles and responsibilities have been carefully water supply have very high value and are difficult laid out as well. Among the statutory responsibilities or uneconomical to insure. Here the central govern- to ensure safety and continuity of government, three ment recognises that it needs to help and in essence sections of the Civil Defence Act 1983 are particu- it settled upon a 40:60 split of the cost of restoration larly relevant: sections 43, 44 and 45. The first of of these major assets, with some specified condi- these in particular obliges departments and other tions. This was based on the assumption that the central government organisations to maintain plans requirement to meet 40 percent of the recovery cost for the continuation to the fullest possible extent of would provide sufficient incentive for local authori- their essential functions during and following a state ties to be careful in the management and protection of national emergency or civil defence emergency. of their own assets. To fulfil these obligations, many departments have back-up phone and computer systems in centres The government defined some guiding principles outside the capital. and issued them in its recovery plan called Natural Disasters and Emergencies within New Zealand. The chances of the parliamentary complex collaps- The recovery plan sets out the framework, responsi- ing are slender, but, as is only prudent, the govern- bilities, principles and policies for government ment does have a back-up plan to shift to an alterna- assistance. tive site outside Wellington should it be required. As soon as governance was assured — either in Wel- It can encompass many forms of event, from the lington or out of it — the government would need to catastrophic (such as earthquakes, floods and consider what assistance was needed by a city volcanoes), to medical emergencies, and to adverse devastated by an earthquake. events relating to agriculture.

In discussing recovery issues in particular, I want to Naturally one asks the question, Why should central impress on you that government does not shirk its government be involved at all? The answer is that responsibilities, but it does want the risk to be central government’s concern stems from the fact

192 Hon Bruce Cliffe that in each of these circumstances there will 1993 showed that only 37 percent of businesses inevitably be some disruption of community and were prepared should a major disaster occur, 40 economic life and that becomes a national issue. percent were “not really prepared”, 22 percent not at all prepared, and 1 percent “didn’t know”. In the kind of situation that we are likely to be considering at this conference, it is very important A number of our local and regional authorities have that local authorities have a clear idea of govern- undertaken risk surveys for the purpose of setting ment’s purpose in offering aid, and the conditions insurance premiums. But more is required. There is under which it is given. The specific principles that a pressing need to improve risk analysis in this shape the government’s role in recovery, and which country and to develop practical risk management are set out in the official recovery plan, are as techniques to address the issues that have been follows: identified. In saying that, I am fully conscious that some organisations and local authorities, including 1) Initial and primary responsibility rests with those those represented at this conference today, already directly affected, with government providing have effective mechanisms in place. supplementary assistance when required. 2) Individuals, businesses and local authorities must This need for organisations to better manage their manage their risks properly to ensure that they own risks in the event of a major disaster, has have mitigation measures in place and have become of even greater importance following the adequate financial resources to repair damage. passage of the Earthquake Commission Act 1993. This act provided for EQC to cease renewing 3) Government accepts that it has a role after major commercial property insurance completely from 1 events. January 1996. The government believes that EQC 4) Government helps restore the community assistance is best targeted at ensuring that homeown- capacity for self-help. ers, above all, are able to regain a roof over their 5) Government encourages proper risk management heads as quickly as possible following an earth- practices. quake. EQC is now constituted to achieve this end. The government, therefore, sees the role of the EQC An important point — perhaps the most important as a social one. Businesses know best how to point that I will make today — is the emphasis on manage their risk and should be left to do so. risk management. The government’s message is very clear. The government expects comprehensive risk I would like to mention the work done by bodies like management practices on the part of all local and the Wellington Regional Council, the Canterbury regional authorities, businesses, and individuals. Regional Council and the Taranaki Regional Coun- cil under the Resource Management Act to fulfil The concept is simple. their duty to manage the risks facing their communities. Among local authorities and those directly affected there is inevitably a far superior appreciation of local My message, to the extent that it is needed here, is to risks than in central government. say that central government in New Zealand sees it as a local responsibility not just to repair damaged The risks are neither unknown nor unknowable. infrastructure, but to minimise, mitigate, and manage They should be examined and assessed — just as the the risk. That is: Earthquake Commission, our conference hosts, are •to minimise the chance of an adverse event holding this meeting to gather together ideas and happening, where possible, and to reduce the information about how to manage earthquakes. likelihood of natural disasters triggering subsequent effects; Sensible alleviation or mitigation measures can make an enormous difference. Lives can be saved, •to mitigate the consequences of an event, should damage can be reduced and recovery costs can be it occur, through sound engineering and con- reduced markedly. struction, and careful maintenance; and •to manage the risk with appropriate financial and But risk management has not been fully appreciated operational provisions. in our communities or among local authorities. A survey done in my own electorate, North Shore, in

193 Wellington After the Quake

For example, the Accident Rehabilitation and potentially available in the event of a serious Compensation Insurance Corporation (ACC), one of disaster. In practice, those responsible would be able my ministerial responsibilities, commissioned a (through the recovery coordinator) to call on a very report from Cambridge Architectural Research wide range of assistance. Individuals would have Limited and the Institute of Geological & Nuclear access to the full range of help through ACC and Sciences a year ago on the likely level of deaths and social welfare that is available under normal condi- injuries following a major seismic event in a major tions. populated area. Most available material related to experiences overseas, where construction methods As an indication of the range of central government and standards differed from those in New Zealand assistance that would be available to deal with a and where population densities were much higher. serious event in Wellington, I would flag the As a result of this, ACC believed it was paying too following: much in premiums for its international reinsurance, • emergency feeding, housing and welfare; the system under which insurance companies spread the risks of a single organisation being caught by a • transport for evacuation; rare event producing demands for payouts well •restoration of government services and facilities; outside the normal predictable level of payouts. In •assistance with some other services and facilities ACC’s case, the premiums being paid for re- if uninsurable or if urgently needed (e.g. water insurance were based on the established level of supply, sewerage, bridges, and roads); expectation of a major natural disaster occurring in this country, but with that expectation overlaid with • expert advice and temporary labour to speed casualty levels of overseas disaster patterns. The clean-up; report was accepted as authoritative by ACC’s • coordination of responses from central govern- international reinsurers, and the premium now being ment and appointment of a recovery coordinator. paid to buy an acceptable comprehensive level of reinsurance cover is substantially lower than before There is one important qualification that I want to this study was done. emphasise here. Government agencies or funding may be used to give assistance in the assessment and More New Zealand organisations could be doing this appropriate restoration of these services and facili- sort of research so that they better understand the ties that are the responsibility of other agencies. But nature of the risks faced and their relative mag- this applies only where commercially viable insur- nitudes. This will provide a sound basis for sensible ance cannot be obtained or where other agencies mitigation strategies. cannot do the job quickly enough. By way of elaboration of the principles just outlined, In general, if an asset is insurable then central let me mention briefly some important conditions government is unlikely to provide assistance. that apply to the way government provides assistance. Assistance will normally only be provided That is an important guideline to keep in mind. where: •there is a statutory requirement for action or a And what of the future? need to invoke a statute to achieve the desired ends; or In late 1994, my colleague, Civil Defence Minister Warren Cooper, initiated a “green fields” examina- •recovery procedures cannot be carried on without tion of the way that emergency services in New government assistance; or Zealand are managed. The purpose is to develop • central government help will aid the coordination options for better organisation of emergency serv- of the process significantly; or ices, and the review will be looking at trends developing overseas that may in time be applied •there are economies of scale. here. A trend overseas that might occur here as a result of this review is the shift of emphasis away Although the programme for this conference identi- from response in the traditional sense to the more fies some specific forms of government assistance general idea of emergency management. Emergency (Social Welfare, Department of Labour and ACC), management takes a more comprehensive approach these represent only a small part of the services to dealing with extreme events, placing greater

194 Hon Bruce Cliffe emphasis on anticipating and preparing for large- Every New Zealander must play a part in managing scale disruptions. the risk that a major earthquake may occur in their lifetime. This risk management works best for all There is also a need in New Zealand to look more when it is shared by all. This, and only this, is the closely at the social impact of earthquakes. In the route to a swift return to a normally functioning past, we have tended to approach earthquakes from community after a disaster has occurred. an engineering perspective — that is to focus on technical solutions to the risk. This has led to some This in no way is a buck-passing strategy — it is imbalance between the resources devoted to analys- reality. The individuals in local communities have ing the engineering consequences and those for the more cause, more incentive and a greater ability to social consequences of earthquakes. By contrast direct and implement a recovery “after the quake”. It with some other countries, not enough studies have is government’s job to encourage, coordinate and been done on how New Zealanders might be ex- empower them. pected to behave after a major quake. There is room for further work in this area.

Also worthy of further study are the opportunities presented by the recovery process after a major disaster. A plan for recovery can start with the question — if we were starting anew, what would we do?

I understand that Professor Dennis Mileti addressed the conference yesterday on why cities stay where they are, no matter how many times they are damaged. It may not, therefore, surprise you to know that, following disasters like Cyclone Bola or the 1983 Ash Wednesday fires in Melbourne, most people chose to recreate the environments that the disasters had swept away so efficiently. Surely the challenge that faces us is to design new environments aimed at mitigating the impact of such events.

In conclusion, I cannot stress highly enough the importance that this government places on individuals, businesses and local authorities playing their part and taking prime responsibility for disaster management. They must be encouraged and empowered to minimise, mitigate and manage disaster.

Over this century, New Zealanders, like many others in the western world, developed a welfare state mentality, believing that government would come to their aid in any circumstance. This past decade has seen a radical change in this attitude in many vital areas. Disaster management is yet another area where the role of central government should be put in perspective. Of course central government is there to play the role that only it can. It has the flexibility to respond in different ways to different situations. But it cannot be expected to carry the full burden of coping with disaster and nor is it best placed to do so.

195 Wellington After the Quake

196 Discussion Social aspects of recovery

andy Wong (Reserve Bank of NZ) asked John Feast (Bradford Realty) asked how the govern- about work with different ethnic groups. ment reconciled its desire to encourage risk manage- M Rachel Scott replied that Wellington City ment with housing the Minister on the fault line. Mr Council intends to work with many groups, but have Cliffe replied that his “granny flat” in Tinakori Road mostly concentrated on Pacific Islanders and Maori was so small it would probably remain intact. at present. Somebody remarked that the Prime Minister also resided on the fault line, in what was formerly a Heather Smith (Waitakere City Council) said that dental clinic. different pictures of family outcomes had come from the Edgecumbe earthquake and Cyclone Bola — Jenny Rowan asked what would happen to the chain children were reported as having nightmares after of command in a disaster. Mr Cliffe replied that the the former, but not the latter. Rachel Scott said that chain “would fall like a pack of cards” and end up she supposed it was dependent upon the type of with the Wellington local government organisations. event — with an earthquake there is no warning, but People should not sit back and wait for central a cyclone is known about in advance. government to decide.

The rest of this discussion was addressed to the Hon In response to a question from Jules Maher (Tele- Bruce Cliffe (Associate Minister of Finance and the com) about other ways of encouraging businesses to Minister responsible for EQC). take on their own risk management, Mr Cliffe said that it was a shock to have taken away the “enve- Graham Miller (Wellington Regional Council) lope” of EQC support, but businesses were taking on remarked that, in the 12 years since the Civil the challenge well. Perhaps the message that the first Defence Act was passed, the structures of local and priority for EQC was to provide insurance cover for central government have changed and many authori- the community to restore its warmth and shelter had ties have divested themselves of control of their not been communicated well enough. facilities. He asked when the review of the legislation that many people had recommended was going Dave Owens (Fire Service) asked at what stage it to happen. Mr Cliffe replied that the message had would become economic for the civil defence aspect been received, loud and clear, and the process was of the Transmission Gully route out of Wellington to under way and would take place when the Minister be supported by government. Mr Cliffe replied that of Civil Defence wanted it to. both economic and strategic issues were being considered and that he would take the civil defence George Walker (Alexander Howden Reinsurance) message at this conference back to his colleagues. asked how the government knew that overseas organisations would want to take on much of the David Hopkins (Kingston Morrison) asked about the reinsurance that it was wanting to share out. Mr implications of government pushing risk manage- Cliffe said that the government believed it would ment out to private organisations while at the same only happen if those overseas organisations felt that time being a source of last resort for funding. Mr it was worth their while — which was also related to Cliffe replied that the main thing was to ensure that the national debt. the funds were there. If New Zealand had no debt, an earthquake would pose little problem financially. George Tyler (Auckland Regional Council), noting that an earthquake disaster was as different from a Peter Yanev (EQE International) said that he was market situation as anything could be, asked if Mr bothered that the excess applied to homeowners by Cliffe could give an opinion on what might be the EQC is only $200. With perhaps 100,000 claims source of last resort for funding for reconstruction. following an earthquake, mostly minor, the excess Mr Cliffe replied that it would probably be the becomes a major nuisance, he said. In California, government. However, people should look to their they were moving to 10 to 15 percent excess in order own resources first. to encourage people to have retrofitting work done

197 Wellington After the Quake

to reduce the risk. Chris Henri (Insurance Council of Australia) agreed that the Newcastle earthquake had shown that the excess of $200 that applied in Australia was too small and a real nuisance, and he thought it should be $5000 in Australia. Mr Cliffe replied that he had not been asked to consider that before, but it certainly should be looked at.

198 Kiyoyuki Kanemitsu

Recent Overseas Experience

199 Wellington After the Quake

200 Kiyoyuki Kanemitsu

Kobe presentation

Kiyoyuki Kanemitsu

Director, International Department, Kobe City, Japan

The people of Kobe thank you for your sympathy In addition to being the largest port, Kobe is the and prayers. centre of vital links in the nation’s transportation system. Since Osaka Bay is surrounded by a largely Before the earthquake, Kobe had become a very mountainous region, many of the roads and railways attractive place to live and work. Known as the are concentrated in the Kobe area. They include the “door to heaven”, it was a prosperous harbour city Hanshin expressway between Osaka and Kobe, the nestling between the Rokko Mountains and the Meishin expressway between Nagoya and Kobe, and Inland Sea. Located in the centre of Honshu, Japan’s the Sanyo Shinkansen (bullet train), which transports main island, it combines easy accessibility to other passengers between Tokyo and Osaka to the east and major urban and commercial centres with delightful Okayama and Hiroshima to the west. vistas of rural life. The city is only three hours travelling from Tokyo by bullet train, and Kansai The great Hanshin-Awaji earthquake on 17 January international airport takes only 30 minutes to reach 1995 occurred at 5:46 am. It is very significant that by jetfoil. Together with Osaka and Kyoto, it forms we suffered a direct hit at a shallow depth, which the focal point for the economy of western Japan. contributed to the high level of shaking. There were nearly 5500 dead and 15,000 injured. The number of Kobe has a population of 1.5 million in an area of damaged buildings and houses totalled 86,700 in 550 square kilometres. The city is divided into two Kobe. About 89 percent of victims were crushed to sections by the Rokko Mountains running from east death, and most of the rest died in the fires that to west. The southern part, which faces the sea, started in many places. Most died in ground floor forms the urban area, and the northern and western rooms and most were elderly. About half of the parts are rural, accommodating many newly devel- victims were in their 60s or older, because they oped large-scale housing complexes. The urbanised preferred to live downstairs. area, which was hit hard by the 17 January earthquake, stretches like a ribbon 30 km east to west and The earthquake is the world’s most costly disaster, 2 to 4 km north to south. This narrow strip of land with value loss estimated at 9.9 trillion yen (US$120 occupies less than 30 percent of the total area of billion), excluding the loss of business opportunities. Kobe but is home to 80 percent of the population. The population density is about 6800 persons per We received a lot of criticism about our lack of square kilometre, which is very high when compared preparedness in the aftermath of the quake. How- with an average of 2700 for the city as a whole. ever, although experts had documented the presence of active fault lines in our region, nobody ever Kobe is well known as Japan’s leading international imagined such a destructive disaster would occur in port, handling 1700 million tonnes of cargo per year. our city. In Japan, only about 7 percent of residential After the opening of its port to the world in 1868, fire policy holders had insurance against earth- many foreign traders came to Kobe and helped to quakes. In Tokyo, which is the region of highest form a unique cosmopolitan community. The foreign perceived risk of earthquakes, the figure is 16 influence can be found in the city’s architectural percent, but in our prefecture, only 3 percent of the styles as well as its variety of ethnic restaurants. holders purchased the insurance.

The city is known as an active, innovative devel- The city had a detailed plan for emergencies, but it oper. Two artificial islands (Port Island and Rokko has to be admitted that there had been some reluc- Island) have been reclaimed, joined to the mainland tance to spend time and energy on ‘low probability’ by two bridges and are the site of the container and ‘what if’ scenarios. At the same time, the one wharves and many new multistorey buildings. These that hit us was much bigger than anticipated. The islands are considered symbolic of the forward- intensity was rated at the maximum of 7 on the looking vision of the municipality. Japanese scale for the first time ever. The unusually

201 Wellington After the Quake intense quake created many unexpected situations, would also suffer great damage. In Kobe, 15 city which undermined our response seriously. employees died, 950 people lost their homes, and about 40 percent of the total of 22,000 city workers The intense quake damaged part of the emergency were affected in some way. telecommunications system of our fire department, making it impossible to obtain information readily Looking back over the turmoil right after the quake, and swiftly about damage caused to lives and lack of water was one of the main factors that defied property. The Hyogo prefecture’s sophisticated our response efforts. The fire crews struggled with satellite circuit system was also damaged, which lack of water because they found many hydrants and delayed the gathering and relaying to Tokyo of some water tanks damaged. They used school necessary information about the affected areas for swimming pools, rivers and the sea as alternative the early stages of our response. sources of water. Broken water mains also hindered medical activities. On the second artificial island, we The extent of damage to transportation systems was installed a salt water distillation apparatus to assist a surprise. Because of the population density in and the hospital. Hundreds of pump trucks were de- around Kobe, most of the expressways and local ployed to supply water for the people, in addition to railways are constructed on elevated platforms, provision of bottled and canned water at the evacua- which were believed to be able to escape major tion centres. damage even if hit by a big earthquake. However, the Hanshin earthquake brought serious damage, For the past two months since the quake, we have such as column failure, shifting of the superstructure had no time to criticise ourselves for our ‘unprepar- platform on the column piers, division between edness’, as we have had to deal with many situations sections of the structure, and sections of roadway and have been busy just trying to recover from the dropping from the support columns. Surface roads devastation. also suffered significant damage, primarily from subsidence and liquefaction. Even the subway We have restored (by late April) 96 percent of the system, which was thought to be very resistant, was water supply throughout the city, except in areas partly damaged and forced to suspend all of its rail where rubble has to be removed to restore service. service. Recovery of 70 percent of the gas supply has been completed. The electricity system was restored the We never anticipated there would be such extensive soonest, with 50 percent of the power supply subsidence and soil liquefaction. The port facilities recovered on the day of the earthquake and the entire along the waterfront as well as on the artificial supply in six days. islands became almost completely unusable, requiring shipping to be diverted to other ports. Only Surface streets were more easily and quickly seven out of 239 berths remained operational. Large repaired. Within the first few days following the portions of the open areas on the waterfront and earthquake, construction crews achieved significant islands sank and became flooded. Dock facilities, progress in clearing and repairing them. The col- including the huge cranes used for loading and lapse of a long expanse of the Hanshin expressway unloading container cargo, suffered heavy damage. was one of the most striking results of the quake. Many commercial structures around the docks as There is a plan to complete this main link between well as roads and railways providing dock access, Kobe and Osaka by the end of next year. More and including the bridges to the islands, were signifi- more railway links are reopening. The most impor- cantly damaged. tant rail system, Japan Railways, announced its intention to get all of its lines back in service by the To our regrettable surprise, subsidence and liquefac- end of April. tion also caused heavy damage to underground water, gas and other utility pipes, suspending the Recognising that the port is vital not only to our city supply of these necessary services. We had believed but also to the country, every effort is being made to that underground structures would escape major repair the port facilities. There was extensive damage, but in fact all these lifelines were cut. evidence of liquefaction on the first artificial island, but less on the second because of the techniques We did not prepare for the situation where those used in construction. Almost all of the 239 berths, who work in the various rescue and recovery fields including 23 container berths, were damaged, and

202 Kiyoyuki Kanemitsu the first artificial island was covered with several (US$2.8 billion) is earmarked for reconstruction centimetres of a mixture of silt and sand that had projects, including urban rezoning and redevelop- come to the surface during the quake. Now, this ment programmes, housing construction and special material has been removed and the streets have been assistance to small- and medium-sized companies. cleared by road graders. By late April, 104 berths have been restored and seven container berths will In addition, the city and prefecture agreed to set up a return to service. The bridges connecting the artifi- joint 600 billion yen fund (US$7.1 billion) to cial islands to the mainland will be repaired by support quake victims. Profits from this ten-year August. According to the recovery plan, half of the fund will be used to subsidise payments on housing port facilities will be restored this year and full and business loans, to promote employment, and to operation will begin in two years. help private schools and cultural assets. Money for the fund will be raised through the issuance of local The provision of housing for homeless survivors in government bonds to be redeemed in ten years, with our city is another priority in our recovery efforts. Hyogo prefecture shouldering 400 billion yen and Already 15,000 of a planned total of 30,000 tempo- our city the remainder. We are hoping that the fund rary homes have been built. There is a plan to build may be further bolstered with income from a quake 80,000 new homes over the next three years as part recovery lottery and a part of the donations that were of the rehabilitation programme. collected for the quake-hit areas.

A ten-year redevelopment plan being developed in I would like to share with you some suggestions that conjunction with the national and prefectural experts and scholars have made on how to better governments is expected to be completed by July. respond to an earthquake disaster, based on our experience in the 17 January earthquake. The budget for the coming fiscal year beginning in April is the largest ever, at 2.78 trillion yen (US$33 There is a definite need to secure multiple means of billion), a 33 percent increase on last year’s. The communication, for example satellites and radios to budget includes various projects to aid quake victims supplement national telephone lines, and they have and promote the rehabilitation of our city. to be quake-proof. It is also important to build an underground tunnel to house electricity and water The city will issue four times the amount of bonds lines, and to equip schools and other designated from the previous year to cover the shortfall ex- evacuation centres with quake-proof water tanks. pected from the combination of the budget increase and an anticipated 30 percent drop in tax revenue. After an earthquake, it is important to quickly stop Many businesses were hit hard by the quake, and passenger cars and other ordinary vehicles from they will pay less tax because they will earn less this using major roads, so that rescue and relief supplies year. We took an aggressive stance in making the can proceed smoothly. It is necessary to have a budget. Some people are worried about future fiscal secondary command centre, in case the main difficulties, but we believe it is the only way to give command centre is damaged or inaccessible. It is expression to our firm determination to achieve a helpful to construct rail tracks that link different speedy recovery from the disaster. railways together so that alternative routes can be constructed even when sections of certain lines are Including the supplementary budget for fiscal year damaged. 1994 approved in February, the city’s complete quake-related expenses will reach a total of 1.14 In general, it is important to have several back-up trillion yen (US$13.5 billion). The city allocated plans for every system and office, because in a 55.8 billion yen (US$660 million) for the manage- disaster it is impossible to predict which areas will ment of shelters, food and other supplies for evacu- become inaccessible, which buildings will collapse, ees, including temporary housing for the elderly and or who will be unable to get to their job posts. Once the disabled. We will spend 202 billion yen (US$2.4 basic disaster and relief system plans are con- billion) on the reconstruction of port facilities and structed, additional plans for how to deal with 183 billion yen (US$2.2 billion) to remove debris foreign offers of aid, as well as foreign news media, and rubble produced by the quake. The city will also would also prove helpful. assist reconstruction of the Hanshin expressway and private railway lines. Moreover, 238 billion yen

203 Wellington After the Quake

In Japan there is an old saying: “National disaster comes when we forget”. We learned the truth of this in such a tragic way. The great Hanshin-Awaji earthquake should be taken as a wake-up call for cities with a relatively low level of earthquake risk, as Kobe had.

Recently, building technology and emergency preparedness techniques have made remarkable progress. However, advances in building methods and codes do not address the problem of an ageing inventory of existing buildings which fail to meet current building standards. Anti-disaster confidence is dangerous. Even a well prepared region may not really be ready for a “big one”.

Nature speaks, but are we always listening?

204 Robert Park

The great Hanshin earthquake

Robert Park

Deputy Vice-Chancellor and Professor of Civil Engineering, University of Canterbury, Christchurch, New Zealand

At 5:46 am on Tuesday 17 January 1995 in south failure, so as to bring back lessons for New Zealand, Kobe, Japan, a 6.9 Richter magnitude earthquake and to assess the preparedness and emergency occurred with epicentre 30 km out to sea, off response. The team spent ten days in Japan, mostly Awajishima Island, and its source 20 km deep. The in the Kobe area, inspecting damage and talking to strong ground shaking in Kobe lasted 20 seconds engineers and scientists to obtain as much informa- and the maximum horizontal ground accelerations tion as possible. A full report was published in the recorded were 0.83g. March 1995 issue of the Journal of the New Zealand National Society for Earthquake Engineering. As The result was over 5000 people dead, tens of well as time spent in Kyoto on briefings, gleaning thousands injured, and hundreds of thousands of information from newspaper reports and videos of people homeless. Thousands of buildings were badly damage, and visiting the Disaster Prevention damaged and many collapsed; major roadways and Research Institute of Kyoto University, the team railways were cut due to collapses of bridges; fallen visited Kobe for tours of damaged areas guided by debris and ground surface movements distorted staff from the Hanshin Expressway Public Corpora- railway lines; port facilities were unusable; electric- tion, construction companies, and universities. Kobe ity, water, and gas supplies were cut, telephones out was approached by rail or bus or ferry and then on of order, and sewage disposal uncertain. foot into the city. The team walked many kilometres.

Some damage was particularly devastating. In a Damage hospital building typical of many older major buildings the columns of the fifth storey collapsed, The earthquake caused extensive damage in and causing the floor above to drop, crushing to death 49 around Kobe, mainly in a narrow strip of alluvial people. and colluvial flat land between the mountains and sea. The strip was 1 to 2 km wide and 30 to 40 km Many residential houses were badly damaged; many long and extended through Kobe and the adjacent collapsed and were followed by terrible fires in communities of Ashiya and Nishinomiya. many areas. On the fourth day after the earthquake about 310,000 residents spent the night at 1077 halls Traditional Japanese houses performed badly. These and gymnasiums used as refugee centres. houses were mainly one or two storeys, with timber or steel post columns. Roof tiles were laid on 50 or There are many lessons to be learned regarding 75 mm thickness of clay (for insulation), resulting in construction to resist earthquakes from observing the a heavy roof; walls, which consisted of timber lath damage caused by a major earthquake. Within 6 with clay infill between the posts reinforced by days, a reconnaissance team arranged by the New bamboo, had poor resistance to horizontal shaking. Zealand National Society for Earthquake Engineer- Many houses were destroyed by collapse of columns ing and sponsored by the NZNSEE and the Earth- during lateral shaking under the weight of their quake Commission, was sent to Kobe from New heavy roofs. Modern housing, with lighter roofs and Zealand. The team, which I led, comprised ten New better bracing against lateral shaking, stood the Zealanders, a Japanese, an Australian and a Cana- earthquake well. dian, and their expertise covered engineering geology and seismology; geotechnical engineering; The strength of a structure may not be as great as the building structures; industrial facilities; bridges and imposed seismic forces. For house structures to other lifelines; architecture, building services and remain in the elastic range during a major earth- housing; and fire and emergency response. quake would require huge seismic design forces, and seismic codes in Japan, New Zealand, and other The objectives were to inspect damaged and undam- countries use smaller seismic design forces. Typi- aged areas and structures to assess possible causes of

205 Wellington After the Quake cally a code as used in Kobe recommends a seismic Ground liquefaction occurred extensively, and there design force of 0.2g applied horizontally and a was an example of one multistorey building which, design working stress with high allowable stresses. though remaining intact structurally, simply toppled Hence, to survive the earthquake well, the structure over during the main earthquake and a large after- must be able to deform in the post-elastic range shock. without significant damage and certainly without collapse. Other structures

A new seismic code for buildings was introduced in The same problems occurred for bridges as for older Japan in 1981, and buildings in Kobe designed since buildings. For example, a 600 m length of the then performed very well on the whole. In those Hanshin expressway overhead bridge toppled over modern buildings, the structure and the glass due to failure of the columns. The columns lacked cladding had both been designed so that they could ductility and failed in a brittle manner, due mainly to deform without fracturing, and there was little inadequate circular hoop steel to prevent a shear damage to either. This emphasises the need in New failure, and also to brittle failure of butt welds in the Zealand to enforce our current building design and longitudinal reinforcement. In the case of some other construction codes strictly, and justifies the consid- bridges, spans dropped off piers that had moved by erable upgrading of our seismic codes which has about half a metre because of liquefaction. occurred since the mid-1970s, commencing with the general design and loadings code NZS 4203:1976. Japan’s top container port was put out of action due This upgrading involved the introduction of capacity to ground movements (settlement and spreading) design, in which structures are made capable of and crane collapses in the berth areas. The gravity yielding in a ductile manner during a major earth- caisson wall structures that retained the reclaimed quake and brittle collapses are avoided. For exam- islands rotated and moved laterally about 2 to 4 m, ple, in the capacity design of building frames, the resulting in lateral spread of the ground extending columns are deliberately made stronger than the often as far as 100 m behind the port breast works. beams so that, in the event of a major earthquake, Severe damage was inflicted on container cranes and yielding occurs mainly in the beams which are made adjacent buildings. adequately ductile, i.e. able to maintain their load- carrying capacity despite significant deformation. Lifelines In Kobe, lifelines were severely damaged by the Retrofitting earthquake over a large area: 900,000 households Many older buildings in Kobe did not fare so well were left without electricity; 850,000 households — typically buildings of the 1950s and 1960s, which were left without gas; water supply cuts affected were designed to old (now sub-standard) codes. about 2.5 million people; 160,000 telephone lines Many suffered failure of columns (both reinforced out of 800,000 were out of order; all railway serv- concrete and structural steel), which brought the ices stopped; major expressways were closed. An buildings down. Most deaths in buildings in Kobe elevated expressway, which was a main artery for were due to the collapse of the columns of a storey, traffic movement between Osaka and Kobe, col- typically the bottom but also at times an upper lapsed over many parts of its length, and many storey, crushing people as the floor slabs above railway bridges collapsed. those columns pancaked. Engineers refer to this as a “soft storey failure”. Those buildings had been The electricity was restored remarkably quickly, in a designed according to the codes of the day and the day or two. Water and gas took much longer, designers could not be blamed. Our knowledge of causing hotels and many other buildings to close how to design for earthquake resistance has in- although structurally sound. Fire followed the creased a great deal since the 1960s. Nevertheless, it earthquake, but limited water was available to fight does illustrate that many of our older buildings need fires. More than 350 fires broke out, wiping out to be upgraded (strengthened), a task engineers call around 100 hectares of densely populated area. “retrofitting”. Some older structures are inherently Many were caused by the overturning of stand-alone strong and have satisfactory earthquake resistance. heaters (electricity and gas). It is obviously impor- Others are not strong and are not ductile and need to tant that lifelines be capable of resisting earthquakes be retrofitted.

206 Robert Park without significant damage, so as to avoid serious son had a 7.8 Richter magnitude quake with 17 disruptions to the life of a city. deaths; and the 1931 Hawkes Bay 7.9 Richter magnitude quake caused 256 deaths. The people New Zealand’s Civil Defence, fire service and other The people of Kobe were observed to be remarkably emergency services need to be better coordinated to resilient, showing great determination to rebuild handle a major earthquake. Are they prepared? their lives. They got on with life. People walked Some think not. Kobe was caught out by the magni- unemotionally around the wreckage to work, tude of the event. carrying their day’s water supply on their backs. Structural engineers need to be prepared to classify Impressions were that they are a very honest society. damaged buildings, for example: Piles of possessions on the footpaths outside houses • dangerous — evacuate; were left untouched and bicycles were left un- chained in the streets. There was a feeling of secu- •further structural check needed — evacuate; rity when walking about. No looting was obvious. •satisfactory — need not evacuate. The city was remarkably open, with access to the Counselling services for trauma need to be organ- damaged areas. They were tolerant of visitors, many ised. Lifting and digging equipment, tracker dogs, of whom were sightseers coming in from other parts paramedics, need to be organised. Areas for dump- of Japan. ing debris should be located. The public were also reliant on quite a degree of Individual households need to be better prepared, government aid. Refuge centres were set up, and because there may be several days after a major water trucks were in the suburbs. earthquake when we have to fend without water and electricity — torch, portable radio, food and water Preparedness need to be available in every house. The great Hanshin earthquake will have a profound effect on Japan’s earthquake preparedness. In the Conclusions past, Japan’s disaster mitigation strategy has been The 20 seconds of strong ground shaking of the heavily dependent on structural (building code) great Hanshin earthquake has provided many measures. Bitter criticism is being levelled at important lessons for New Zealand. Of these, four government in Japan for its slow response and are paramount. inadequate preparedness, and in the future more emphasis will be given to these. • Buildings designed to modern seismic codes survived the earthquake well. This justifies the Kobe had not been considered a likely hit for a design and construction provisions of current major earthquake before Tokyo, although it did have codes (which are very much more severe than a Richter magnitude 7.5 earthquake in 1596 that older codes) and emphasises the need to enforce flattened the city. The great Kanto earthquake of current codes strictly. 1923 caused 140,000 deaths in Tokyo. •Older structures are an earthquake risk. Many pre-1970s structures in New Zealand may need We are lucky in New Zealand that for more than 60 retrofitting. years since 1931 a major earthquake has not occurred in an urban area. However, a major earth- •Lifelines of cities need to have adequate seismic quake could occur in Wellington or anywhere in resistance. The use of buildings after an earth- New Zealand. According to data recorded since the quake will be severely hampered if, for example, 1840s, New Zealand can expect a Richter magnitude the water supply is cut for weeks. 7.0 earthquake about every seven years. There have •Disaster preparedness and emergency response been three earthquakes with Richter magnitude and recovery services are critically important. greater than 7.8 during that 150 year period: in 1855 How well prepared are we for the effects of a the southwest Wairarapa had a Richter magnitude major earthquake in an urban area of New 8.1 earthquake, which also affected Wanganui and Zealand? Wellington, resulting in five deaths; in 1929 Murchi-

207 Wellington After the Quake

208 Jose P de Jesus

The Philippines after the 1990 quake and the Pinatubo eruptions

Jose P de Jesus

Executive Vice-President, Philippine Long Distance Telephone Company

On 16 July 1990, the central and northern parts of Luzon, the biggest island group in the Philippines, were rocked by an earthquake with a magnitude of 7.7 on the Richter scale. After 45 seconds, nine cities and 39 municipalities in 15 provinces lay damaged, some of them almost totally devastated. Some 1200 people were killed and over 3000 were injured.

Barely a year later, another natural disaster struck — Mt. Pinatubo, a nearly forgotten volcano in Central Luzon, erupted ash clouds 20 to 40 kilometres high, covering almost the entire country in a blanket of white. Ashfalls and mudflows from Mt. Pinatubo killed or injured at least 800 people in three provinces and triggered massive evacuation by entire communities to safer ground.

These two disasters wreaked havoc on provinces that accounted for a major percentage of the Philip- pines gross national product. The destruction of industrial, agricultural and commercial establishments caused massive dislocation of the economy of affected areas as well as of the whole country.

The task of reconstruction was not easy. Despite the limitations, however, the task of rebuilding areas hit by the 1990 earthquake was finished in good time, and although there are continuing threats from Mt. Pinatubo, the social and economic life of affected provinces is basically back to normal.

Today, the regions most affected are designated critical growth areas: they are important in attracting international investors and their progress is expected to have downstream effects elsewhere. The success of the reconstruction effort brought to the fore important lessons in dealing with natural disasters, and these are summarised.

Introduction nearby Tagaytay ridge, where there are excellent vantage points from which one can look down and The Philippines is a land blessed with natural safely view the fiery explosions of Taal, either with beauty. Its sunsets and beaches and mountains have a telescope or with the naked eye. been widely talked about and written about. How- ever, the country has also suffered natural calamities of such immense proportions they made world news. The killer quake Natural hazards in the Philippines, however, ceased Before the 1990 northern Luzon earthquake and the to be postcard events after 1990. On 16 July of that eruptions of Mt. Pinatubo in 1991, volcanic erup- year, at 4:26 in the afternoon, the central and tions were more or less viewed as a tourism event. northern parts of Luzon were rocked by a shallow The world’s most perfectly coned volcano is in the magnitude 7.7 earthquake, which was felt near its Philippines: Mayon volcano in the province of epicentre at intensity 8. Locally, some areas were Albay, near the southernmost tip of the biggest shaken at intensity 9, the maximum in our modified island group, Luzon. Although its recent eruptions Rossi-Forel Earthquake Intensity Scale. The impact did cause damage to life and property, people still of that tremor approximated the explosion of some flocked to its basal slope to view the majestic 10,000 atomic bombs similar to those dropped at display of fireworks emanating from its beautiful, Nagasaki and Hiroshima in 1945. sharp-crested summit.

The world’s lowest volcano is also found in the The damage Philippines. This is Taal volcano, considered a After 45 seconds, nine cities and 39 municipalities in natural wonder because there is a tiny lake at its 15 provinces lay damaged, some of them almost crater even as the volcano itself nestles in the midst totally devastated. Some 1200 persons were killed of a bigger lake. When it erupts, tourists flock to and over 3000 were injured. It is interesting to

209 Wellington After the Quake compare these numbers with those due to the Within minutes after the earthquake struck, mining magnitude 6.9 Hanshin earthquake at Kobe on 27 workers from the nearby Benguet Consolidated January 1995: over 5000 dead and 25,000 injured. Mining Company and young cadets from the Philippine government agencies estimated the actual Baguio-based Philippine Military Academy rushed property damage in the Philippines at about P15 to the scene to begin what was to become days of billion, or roughly US$600 million. rescue work. With nothing but picks and shovels, they hacked their way through the wreckage to The devastation affected major commercial centres rescue the survivors and pull out the dead from and agricultural areas, which comprise the Philip- under the ruins. A few days later, they were joined pines’ breadbasket, as well as cultural and historical by crack rescue teams from Switzerland, France, sites. This triggered what was perhaps the biggest Japan and the US. The number of known casualties reconstruction job in our country after the Second in Baguio, mostly from the Nevada and Hyatt World War. Terraces hotels, numbered 1102 injured and 325 dead. Among the fatalities in the Nevada Hotel crash Government buildings in the country’s National were participants in a conference of representatives Capital Region also suffered heavy damage. of non-governmental organisations (NGOs) from all over the country. Just a few metres away, the Hyatt The affected major urban centres included: Terraces Hotel yielded a survivor on the 12th day of • Dagupan City, which suffered the worst physical rescue operations. He managed to survive for that damage because of extensive liquefaction; long under the rubble by the sheer strength of his will to live. • Cabanatuan City, which saw a most tragic human drama when a school building collapsed; For a time after the tremor, travel from Manila •the internationally renowned city of Baguio, northwards became difficult because major arteries which was transformed within a few minutes in the national highway system were cut. These from a tourist haven to a massive disaster area; included two historic roads: Kennon Road and and Dalton Pass. Luzon’s longest span, Carmen Bridge in President Ramos’ home province of Pangasinan, •the nearby town of Agoo, La Union where collapsed into the dry Agno river bed, looking like centuries-old structures — virtual national an ostrich with its head buried in the sand. monuments — came crumbling down due to the combined effects of liquefaction and severe The physical damage wrought by the 1990 quake, ground-shaking. however, was nothing compared to the emotional toll it exacted on those who lost their livelihood, In Cabanatuan City, which lies some 100 km property and, most especially, loved ones. northeast of Manila, students were in their class- rooms when the entire three-storey building collapsed. Among those who were trapped under the The Pinutabo eruption rubble was a student who, although slightly hurt, We had barely finished rebuilding from the devasta- managed to inch his way out. Amidst groans and tion of the 1990 quake when Mt. Pinatubo, dormant cries for help from his schoolmates, he rushed back for the past five centuries, erupted and spewed ash into the ruins to rescue the survivors who were clouds 20 to 40 km high, covering nearly half of the trapped inside. Without regard for his personal Philippine archipelago in a blanket of whitish safety he went back again and again to pull out the volcanic ash and depositing ash as far as Cambodia. injured survivors. In his last attempt to rescue his classmates, a slab fell on him, pinning him to death. Our geoscientists have reason to suspect that the The Cabanatuan City crash claimed 221 victims: 125 1991 eruptions of Mt. Pinatubo might have been injured and 96 dead, among them the young hero, hastened by the 1990 earthquake. Ground shaking Robin Garcia. was reportedly severe in the Pinatubo area during the earthquake. Three weeks after the tremor, the In Baguio City, the Philippines’ summer capital, two social workers and local peoples living in the major tourist landmarks were totally destroyed: the northwest flank of the volcano reported audible Hyatt Terraces Hotel and the Nevada Hotel, under- rumbling sounds, cracks and increased steaming neath whose rubble were buried many vacationers from pre-existing thermal areas. These were earlier and convention delegates.

210 Jose P de Jesus thought to be just continuing aftershocks of a strong inevitable due to the filling up of river channels by tectonic earthquake and heavy rains in the area and volcanic debris. that they were without volcanic significance. And because large volumes of loosely consolidated With the benefit of hindsight, our scientists now pyroclastic materials still remain in the upper and surmise that the 1990 northern Luzon earthquake middle slopes of the Pinatubo volcano, we will have could have hastened the maturation of the Pinatubo to contend with the continuing threat of lahar flows volcano. for at least the next five to ten years.

Effects of the eruption These two major natural disasters wreaked havoc on the Philippine provinces that accounted for a major Meanwhile, international savants say the eruption of percentage of our country’s gross national product. Mt. Pinatubo is the worst natural disaster worldwide The destruction of industrial, agricultural and in 100 years. They added that its eruptions registered business establishments caused massive displace- perceptible cooling effects on global temperatures, ment in the economy of the affected areas, as well as offering a welcome relief from the irreversible trend that of the entire country. of global warming.

Ashfall and mudflows from Mt. Pinatubo have killed The task of reconstruction or injured at least 800 persons and directly affected It was imperative that the affected areas be rebuilt as the lives of 1.5 million people in four central Luzon soon as possible and their productivity restored. provinces. These include: The task of reconstruction, however, was not an easy • Pampanga, the economic centre of the region and one for us. We had to face two serious limitations: where Angeles City, the former site of the US one, in terms of experience in dealing with natural Clark Airbase, is located; calamities of such nature and magnitude; and two, in • Tarlac, the home province of former President terms of funding the logistics, considering that the Corazon Aquino; 1990 earthquake and the 1991 eruptions of Pinatubo • Zambales, where the city of Olongapo, former took place just when our country was on the verge of site of the biggest US naval base, is located; and an economic take-off. •the historic province of Bataan. Dealing with different disasters Had it not been for the timely alert bulletins issued In the Philippine reconstruction experience, thereby the Philippine Institute of Volcanology and fore, the primary issue was how to determine our Seismology (PHIVOLCS) and the early evacuation priorities in the utilisation of scarce funding and of those living near Mt. Pinatubo, many more would logistical resources. have been killed by the eruptions. That was a less difficult task for the post-earthquake Continuing lahar flow reconstruction efforts, since the tremor was a one- time event, so to speak. It was relatively easy to The Pinatubo eruptions triggered one of the most mount a good estimate of what needed to be done massive human evacuations in our history, as entire and how much it would cost to do it. communities had to be brought to safer ground. The recurring voluminous flows of lahar altered in a The Pinatubo event, on the other hand, remains an rather bizarre way the physical landscape of the open-ended hazard. The seriousness of the annual central Luzon region and caused extensive damage ritual of destruction depends on the vagaries of to infrastructure, agriculture and commerce. weather conditions. Despite the fact that we expect no primary eruption for the next few centuries, The ashfalls and the deadly flow of rain-mobilised secondary hydrothermal explosions still occur. We pyroclastic material have buried farmlands and expect the landscape of central Luzon to continue to populated areas by as much as 30 feet (9 metres). be altered by the annual downhill surge of mud from Our local scientists predict that alteration in the the lahar deposits, which usually occurs during the hydraulic regime of rivers and streams is also rainy season in the second half of the year.

211 Wellington After the Quake

I was privileged to have served in the Presidential While all three were necessarily interrelated, the Task Force formed to oversee the rehabilitation differentiation augured well for better management efforts after the two disasters struck. I was named and public accountability. Most important, the Chairman of the Presidential Task Force for the approach helped us deal with the issue of priorities Rehabilitation of the Earthquake-damaged Areas by in the allocation of funding and logistical resources. former President Corazon Aquino. Later, as Secre- The phases of work served as a framework for tary of Public Works and Highways, I was part of determining what must be done first and to what the Mt. Pinatubo Task Force, which evolved into the extent. Mt. Pinatubo Commission. Our work was subdivided into five areas: Learning from natural disasters •roads and bridges formed one major area of concern; Our experience in the reconstruction efforts brought to the fore several important lessons in dealing with •other vital infrastructure, which included tel- disasters of major proportions and varying nature. ecommunications, power and water; • livelihood and emergency employment; The first is the wisdom of mobilising human and material resources in systematic phases. •social services, which included psychological rehabilitation and health services; and Secondly, the experience showed that what may be • peace and order. scientifically and technically rational solutions may not necessarily be politically and socially acceptable. Funding requirements Thirdly, and a consequence of the second lesson, To undertake the reconstruction work on the earth- local community cooperation and participation, from quake-damaged areas, we estimated that we needed evacuation to reconstruction, is needed. at least P10 billion, or roughly US$ 400 million (at P25 to US$1). Fourthly, early-warning systems, as well as education of the public on how to deal scientifically with Our national coffers were not ready to contend with natural disasters, are important to mitigate losses in such an emergency. It is in view of this that we terms of physical infrastructure and human lives. appreciated a second important lesson: that international support, in terms of funding and technology- Finally, the role of the political leadership is vital, sharing, was indispensable. both at the national and the local levels. To help us raise the needed amount, the international Government response community held a pledging session from which US$ Our first lesson was on the wisdom of mobilising 500 million in grants and soft loans was raised. human and material resources in systematic phases. With this amount and the local counterpart funding, With the creation of the Presidential Task Force for we undertook a total of some 9030 public works the Rehabilitation of Earthquake-damaged Areas projects and directly assisted 146,769 individuals came instructions from then-President Corazon who suffered from the aftermath of the quake. Aquino to have a clear differentiation between rescue and relief work overseen by our National Support from various sources Disaster Coordinating Council and the next phase of The efficient utilisation of international and local work, which was purely rehabilitation, and finally funding support for the rehabilitation of the quake- long-term reconstruction and development. damaged areas depended much on the support of the national and local leadership. As a result, we outlined three stages of government response following the quake: the first was rescue Former President Corazon Aquino was nominally in and relief; the second was rehabilitation; and the charge of the rehabilitation programme, with the third was the longer-term reconstruction and devel- Task Force reporting directly to her. The Philippine opment work. Congress established a committee that convened regularly to monitor the progress of the rehabilita-

212 Jose P de Jesus tion work and to ensure that the funds were properly Science education applied. Another important lesson we have had is the need to upgrade the local residents’ scientific understanding The private sector also had a critical role to play. of natural hazards. To a significant extent, supersti- NGOs, currently a major social force in the Philip- tious beliefs have stood in the way of disaster- pine countryside, helped our government in the preparedness because some residents of Pinatubo, identification of priority rehabilitation projects, for example, have chosen to ignore scientific particularly those in the areas of livelihood and warnings in favour of folk beliefs. We remember social services. that, despite the intense warnings of the forthcoming eruption, some local peoples refused to leave Critical role of communities Pinatubo because of their spiritual belief that their The participation of local communities, however, god, who resided within the volcano, was “merely became even more important in the Pinatubo angry”. experience. This was because evacuation of entire communities had to be undertaken actually in the Early on, it became quite clear that it was necessary wake of deadly lahar flows, which rendered whole to educate the local residents on both the short-term neighbourhoods uninhabitable. and long-term effects of the Pinatubo eruption and the further potential risks that the recurring lahar Moreover, it was in the Pinatubo experience that we flows continued to pose to the nearby towns and realised the all-important fact that there could be communities. Constant briefings were also given for situations where scientifically and technically members of the media to keep them updated on the rational solutions may not always be politically and hazard situation. socially acceptable. Recovery and growth Consequently, consensus-generation at the local community level became critical to the decision- These calamities have not dampened the spirit of our making process on the engineering interventions people in these areas, a fact evidenced by the rise of pertaining to the downward sea-bound flow of new infrastructure and renewed business activity. volcanic and pyroclastic materials. For example, one Today, Baguio City is back on its feet and has of the questions that confronted the managers of the resumed its role as a popular international tourism Mt. Pinatubo rehabilitation programme was how to destination. Dagupan, a sea of mud after the lique- deal with the lahar flow. Some advocated continuing faction experience, is practically a new city, with engineering interventions such as dikes and canals. roads, drainage systems and public buildings better Others, including international experts, underscored constructed than those before the quake. All the the need to allow the lahar flow to take its natural damaged bridges have been restored. There are course. Both courses of action, however, would hardly any traces left of the killer tremor except always put some communities at a disadvantage. people’s memory of those who perished in the There was, therefore, the inevitable clash of preser- disaster. vation instincts among affected communities, thus putting to test the consensus-generation mettle of our In the face of the continuing and difficult consensus- rehabilitation managers. seeking process that accompanies the ongoing mitigation and rehabilitation efforts, the major After a long series of difficult negotiations among regions affected by the two natural disasters have representatives of the affected communities, the been designated as critical growth areas. Northern local officials and the rehabilitation managers, and central Luzon are important entry points for during which the various alternative measures and international investors and their progress is expected their potential consequences were painstakingly ex- to bring downstream effects to the other parts of the plained, a general agreement was reached whereby country. necessary protective dikes would be constructed to save the areas still free from lahar inundation in Three specific development sites are worth mention- order to minimise the damage and contain it within ing. The first is Subic. Located in the Pinatubo- already affected areas. affected province of Zambales, this was the former home of the largest US naval base outside of the

213 Wellington After the Quake

American mainland. Subic today is being developed These two world-class natural disasters have in- in a pattern similar to that of Hong Kong. Its devel- spired our policy- and decision-makers, scientists, opers envisage an area dedicated to light- and engineers and development planners, as well as a medium-scale industries, as well as a portion similar hitherto complacent citizenry, to devise appropriate to Hong Kong’s central business district. The state- measures to live safely with natural hazards. The of-the-art facilities left behind by the Americans, lessons gained from the reconstruction efforts have who restored these base areas back to the Philippines in fact bolstered our confidence and equipped us to in 1991, are making it easier for international deal with similar disaster-causing phenomena in the investors to establish their business inside Subic. future. Volcanic eruptions and other natural hazards Designated as a special economic zone that offers may no longer be mere postcard events after the tax incentives to investors, Subic also boasts of 1990 northern Luzon earthquake and the 1991 world-class tourism facilities, duty-free shops and eruptions of Mt. Pinatubo. In addition to their excellent maritime port facilities. photogenic attractions, they serve as a reminder that Planet Earth is very much alive and still challenges Meanwhile, in the neighbouring city of Angeles, scientists, engineers, mitigation planners and the development frenzy is taking place in another former public in general to find ways to confront natural US facility, Clark Airbase. Its runway, once clothed hazards and mitigate their effects. with thick ashes that were spewed out by Pinatubo, has been restored, together with the other vital Conclusions aviation facilities once used by the US Air Force. Clark has been designated as the site of the Philip- Following the northern Luzon earthquake of 1990 pines’ future premiere international airport, a and the eruptions of Pinatubo volcano in central development that has attracted a lot of foreign Luzon in 1991, the Philippine Government faced the investors to establish business there. When the difficult task of determining priorities in the utilisa- Philippines celebrates its 100th year of independ- tion of its scarce funding and logistical resources for ence in 1998, Clark will be the site of the major the reconstruction of the damaged areas. festivities. The task was less difficult in the case of the earth- A third major development area lies in the City of quake aftermath since that was a one-off event. It is Baguio. Called the Summer Capital of the Philip- more difficult with the aftermath of the Pinatubo pines because of its year-long cool climate, Baguio eruptions because it is a continuing threat, the nature was one of the cities most seriously damaged by the and magnitude of which are dependent on the 1990 earthquake. Days after the major tremor, its vagaries of weather conditions during each year after dazed residents camped out of their homes, fearing the initial eruptions. consequences of the aftershocks. Both disasters brought to the fore the wisdom of Baguio is the site of Camp John Hay, the erstwhile adopting well-defined phases in the reconstruction rest and recreation area of Asia-based US service- work, generating strong support from the affected men. This place is now being transformed into a communities and having good political leadership. world-class family vacation resort, a move that has The latter becomes even more important in cases attracted large Asian conglomerates to put in their where solutions that are scientifically and techni- money and generate employment for the victims of cally sound are not necessarily socially acceptable. the 1990 quake. Both experiences also underscored the need in the The people in the areas affected by the two major Philippines for well-established early warning calamities have learned to accept the reality that systems, and the education of residents in disaster- there is a constant threat of natural disasters similar prone areas in order to adopt a non-superstitious and in nature and magnitude to the 1990 earthquake and more scientific view of hazards. the 1991 eruption of Pinatubo. This acceptance, however, has been tempered and made wise by the These disasters have inspired policy- and decision- realisation of the imperatives of proper disaster makers, scientists, engineers and development management and mitigation. planners to devise appropriate measures to live safely with natural hazards.

214 Peter I Yanev

Insurance and Financial Markets 1

215 Wellington After the Quake

216 Peter I Yanev

Handling risk and claims after a catastrophe — An engineer’s perspective

Peter I Yanev

Director, EQE New Zealand Ltd; Chairman, EQE International, San Francisco, California

with Dr Charles R Scawthorn and W Rodney Smith, EQE International

Strategies for handling risk assessment and the resultant claims from an earthquake in the heart of the Wellington region are presented. These are discussed from experience with several major events of the past few years — the Richter magnitude (M7.1) San Francisco earthquake of 1989, the M8.1 Guam earthquake of 1993, the M6.7 Northridge earthquake of 1994, and the M6.9 Hanshin earthquake of 1995. The strategies are based on extensive and direct involvement with risk assessment and damage predication before and after the Northridge earthquake and direct involvement with claims after the other disasters.

The Northridge earthquake is the event most similar in recent history to a large earthquake in the Wellington region. Except for major (high-rise) commercial structures, the structural characteristics of Wellington’s buildings are very similar to those of Los Angeles. The high-rises can be compared to those of Guam, where seismically designed reinforced-concrete frames were the predominant construction.

Damage in Los Angeles, and more recently in Kobe, was much more extensive than expected or predicted by the insurance industry, and damage to selected classes of modern buildings exceeded the worst expectations of structural engineers. A contributor to these results was the record high ground motions experienced. In Los Angeles, the total direct loss of about US$20 billion and an insured loss exceeding US$12 billion (much of it to earthquake-resistant residential construction) constitute the largest insured losses in US and world earthquake history, excluding major fire following the shaking. Similar, pro-rated scenarios are expected for the Wellington earthquake, unless the lessons of very recent history are carefully studied and applied.

Introduction The Wellington earthquake scenario The staggering magnitudes of losses from recent My comments will reflect some of the key lessons natural catastrophes have caused the insurance learned from a technical and an insurance perspec- industry worldwide to re-examine its practices of tive in the context of the scenario specified for this assessing risks. The unprecedented insured losses conference. Because of experiences in the North- caused by these disasters have also prompted the ridge and Kobe areas, which are directly applicable industry to reassess its practices, from underwriting to Wellington in specific and New Zealand in to reinsurance, loss control, claims handling and general, I shall take the liberty to extend some of the pricing of products. key details of the assumed scenario, which was written long before the Hanshin earthquake, and During the last 24 years, I have participated in the shortly after the Northridge event but before its investigation of, and sent engineering teams to, 60 lessons were fully developed. damaging earthquakes and several large windstorms and floods throughout the world, including most The scenario specified for the Wellington region is significant earthquakes to affect modern industrial- based on a Richter magnitude event of 7.5, centred ised areas. Just in the last two and a half years, that on the city of Wellington. The severely affected area includes the three largest economic losses due to roughly encompasses the North Island south of natural phenomena in modern history (Table 1). Palmerston North through the South Island, roughly north of Nelson. This is the approximate region affected by assumed or calculated Modified Mercalli

217 Wellington After the Quake

Table 1: The three largest economic losses from natural hazards data from a well instrumented event within a major metropoli- Event Date Direct damage Insured loss tan area. Those data, particularly (US$ billion) (US$ billion) in terms of damage ratios, are Hurricane Andrew, Oct. 1992 30 15.5 particularly applicable to Wel- Florida lington and New Zealand Northridge earthquake, Jan. 1994 20+ 12+ because of the great similarities Los Angeles in buildings and their design Hanshin earthquake, Jan. 1995 100-200 3-6 across the entire spectrum, from Kobe wood-frame residential construction to commercial building Intensities of 7 (MM VII). Typically, minor damage construction, to industrial and infrastructure con- will occur over a much larger region, but pockets of struction. Hundreds of thousands of structures were moderate and even severe damage will occur in this affected and tens of thousands of structures suffered area due to specific local characteristics such as poor damage — from total to minor. The earthquake soils, concentrations of value, such as older indus- lasted between 10 and 15 seconds, affected a trial facilities, etc. relatively new region of Los Angeles, built-up in the last three decades, and caused the largest insured The estimates of damage for the scenario are based loss in modern earthquake history. almost entirely on data originating prior to the Northridge event, and rely heavily on data from the The recent Hanshin earthquake was even more 1987 Edgecumbe earthquake (M6.2). Sparse and dramatic. Kobe, a modern Japanese city, generally highly unreliable data exist for New Zealand from and erroneously believed to be highly earthquake- previous earthquakes, but some of these data are also resistant and built to the latest standards of earth- applicable. In California, we faced a similar situation quake-resistant design, suffered a staggering loss. prior to the Northridge earthquake. The data used for The damage data are still being processed, but our various scenarios, including those of insurance observations, as well as several preliminary techni- companies, were primarily from earthquakes centred cal reports, indicate that about 100,000 buildings outside of metropolitan areas. Several recent Califor- were severely damaged and about 30 to 40 percent nia events were centred near or in metropolitan of the central business district of Kobe was de- areas; however, they were either too far (e.g. Loma stroyed. Hundreds of commercial structures, some of Prieta earthquake of 1989 (M7.1) and Landers-Big them new and built to the latest codes, collapsed. Bear earthquakes of 1992 (M7.6 and M6.7)) or were Many, of course, survived with negligible damage. too small and, therefore, did not produce reasonably The earthquake lasted between 15 and 20 seconds. strong or long ground motion (Whittier Narrows earthquake of 1987 (M5.9)). Numerous other The technical and insurance data gathered in Kobe earthquakes throughout the world produced valuable and Northridge, and in all other events discussed data but it was not known how well such data could above, are extremely valuable for use in scenarios be applied to scenarios for large metropolitan areas. such as the present one for Wellington. However, The Coalinga earthquake of 1983 (M6.7) and the the data are inadequate in that they require technical Edgecumbe earthquake of 1987 (M6.2) are two such extrapolation for larger events. At this time we events. Both caused severe damage within very simply do not have experience with a Richter small and remote areas, and affected industrial and magnitude 7.5 earthquake in the middle of a modern housing stock that is typical of both countries. In metropolitan area. Our experience extends only up both cases, a limited number of structures were to magnitude 6.9 (the Richter magnitude of the located right on top of the causative fault and Hanshin earthquake) and up to about a maximum of experienced extremely strong ground motion, but 20 seconds of strong shaking under such an area. An only for a few seconds — typically less than 10 earthquake with a magnitude of 7.5 will affect a seconds. much bigger area than the ones with which we have experience, and the strong ground motion may last The Northridge earthquake dramatically altered and well over 30 seconds — almost twice as long as the extended our database on the performance of the motions that affected the Los Angeles and Kobe building stock of a metropolitan area. For the first regions. Earthquake damage increases with the time, we were able to capture valuable engineering duration of shaking. The relationship is not linear

218 Peter I Yanev but increases in an exponential manner with in- commercial lines portfolios, and to other specialised creased duration. portfolios, such as highly protected risks or specific industry risks. Any reasonable model of a Welling- I have made the above comments in order to place ton portfolio needs to have, at the very least, the the Wellington scenario in the context of our current following: knowledge of what happens to the building stock of • accurate maps of soils and other appropriate a city in a strong earthquake. When we make a geology (these are available); specific set of assumptions, based, of course, on the best available current knowledge, we arrive at a • accurate and adequate property location informa- specific, deterministic scenario. The assumed tion (the data are available, but have they been scenario, I believe, is a reasonable one. However, it collected and put into a GIS in an electronic, or is one of many different possible scenarios, and we other appropriate format?); must recognise it as such. The earthquake may be • accurate and adequate data on the critical larger, the duration of shaking may be longer, the structural characteristics of all types of buildings damage may be much worse, or perhaps, with some and other critical characteristics of industrial or luck, much less. In other words, we are faced with a other facilities (again, the data are available, but set of probabilities and, ultimately, only probabilistic have they been collected and put in an electronic, analyses will give us a better understanding of what or other appropriate format?); we may experience in the future. At this point, I do not believe that we understand adequately the • adequate and reasonable damage functions for probability of when the assumed earthquake may each category of structure important to the happen, but we are beginning to understand what portfolio (such damage functions have been may happen, given actual scenarios such as those in assembled for some types of typical structures Los Angeles and Kobe. for New Zealand, i.e. single family residences, but, as discussed in the text above, the curves do The insurance industry and earthquake not currently represent data from the most important data sources such as the Northridge risk earthquake, nor do they represent damage from Since the financial disaster that befell the insurance magnitude 7.5 earthquakes from actual and industry following Florida’s Hurricane Andrew of statistically adequate experience). 1992, the industry has been in a frenzy to quantify its existing risks — from hurricanes, floods, earth- Several portfolio analyses have been performed in quakes and other natural phenomena. That hurri- and for New Zealand. These have been done on the cane, as well as the results of the Northridge earth- basis of engineering analysis and judgment, or other quake, showed that industry risk models were totally similar methods, as discussed elsewhere in the inadequate. The results of individual insurance proceedings, but without the benefit of the attributes company models were off by more than an order of discussed in the four points above. They represent a magnitude. As a result, there has been a rush, often start, but do not yet define in any technically com- frantic and misguided, to create appropriate software plete manner the risk situation in New Zealand and in order to quantify the risk. Unfortunately, it is a lot in Wellington. easier to develop authoritative-looking computer models, based on the latest geographic information Therefore, it is my impression that the typical New systems (GIS), than to develop technically adequate Zealand insurance and reinsurance company is in and accurate software models for use by nontechni- about the same state of comprehending its earth- cal people from the insurance industry. I shall try to quake risk as was the typical company in the USA place the Wellington earthquake scenario in the and elsewhere before the industry debacle in the context of an insurance industry in a state of dra- Northridge earthquake. Based on what happened in matic change. Northridge, it is safe to assume that whatever happens in the scenario earthquake in Wellington I do not believe that at this time adequate software will dramatically surprise the insurance carriers models for the determination of earthquake risk of involved, unless, of course, they take the necessary insurance and reinsurance portfolios for New steps to adequately determine their risks before the Zealand exist, either in New Zealand or elsewhere. earthquake occurs. That applies to personal lines insurance portfolios, to

219 Wellington After the Quake

Insurance industry losses and 60 percent of the market average, which in itself performance in the Northridge contributes to a higher ratio. We believe that this earthquake very favourable result stems from three areas that we consciously attempted to manage during our four As mentioned above, the lessons flowing from the startup years: risk selection, portfolio management January 1994 Northridge earthquake in the Los and coverage design. Angeles metropolitan area are numerous, are still emerging, and have serious implications for those I will explore very briefly each of these elements of preparing for a similar catastrophe. While only a overall earthquake risk management, emphasising Richter magnitude 6.7 event, the fact that it was a aspects that should be relevant to developing “direct hit” centred in a densely populated, wealthy strategies for better avoiding, insuring, and manag- residential and business community, produced ing a similar Wellington event. extensive damage to a wide variety of structures and caused a loss in excess of US$20 billion, with an Risk selection. As discussed earlier, in order to insured loss currently of more than US$11.2 billion understand the risk, we need to know the risk (Property Claim Services, Rahway, New Jersey, 15 location exactly so as to determine the soil beneath it March 1995). This earthquake is the event most and the distance of the risk from known and sus- similar to a large earthquake in the Wellington pected faults. The latter distance is necessary in region. Except for certain major commercial struc- order to determine the severity of the shaking, which tures, such as very tall highrises, the structural is a function of distance from the source, the fault, characteristics of Wellington’s buildings are very and of the soil, or geology, on which the risk is similar to those of Los Angeles. located. Our criteria stipulate that locations above a certain intensity of shaking are unacceptable risks, With Northridge proposed as the living laboratory, I given the premium structure. Risk selection also would like to confess that my “engineer’s perspec- involves the age of the property. Our criteria stipu- tive” has been broadened, if painfully so, by this late that properties older than a certain age are destructive event. In 1989, my consulting engineer- unacceptable, unless the property has been strength- ing and management consulting firm decided to test ened to more recent building code criteria. For its ideas on risk assessment and management by example, a wood-frame home constructed in 1890 is entering the insurance business as a residential unacceptable, unless it was recently strengthened. earthquake risk underwriter in a program entitled We have found that even in a mandatory insurance Preferred Residential Earthquake Protection, or environment, it is necessary to price according to PREP. In the face of many frustrations in the risk in order to create an individual and societal California marketplace, we managed to have some incentive for risk avoidance (do not build here, etc.) 20,000 homes insured throughout California at the and risk improvement (retrofit the older home, etc.). time of the Northridge event. Prior to that event, California experienced several destructive earth- Portfolio management. Through the use of our quakes: in San Francisco in 1989 (M7.1), Los software, we continuously review the geographical Angeles in 1990 (M5.5) and 1991 (M5.8), near Palm spread of risk of the portfolio. The highest loss ratio Springs in 1992 (M6.1), near Eureka in 1992 (M7.0) in the Northridge earthquake, as illustrated in Figure and east of Los Angeles near Landers and Big Bear 1, was experienced by Insurer No. 3, whose portfolio in 1992 (M7.6 and 6.7). In all of these events our was very heavily concentrated in the strongly shaken software predicted levels of damage, immediately area of the earthquake. Even though we were after the events and before any claims had come in, unaware of the existence of the Northridge Blind consistent with our later experience. Northridge, Thrust Fault, our portfolio management would have however, was very different. While we sustained a precluded a heavy concentration of risk such as that heavy loss of about US$21 million with our tiny experienced by Insurer No. 3. That would have been market share of about 0.7 percent, we did very well done through the specific management of offers in relative to the other major insurers in the market- specific areas where concentrations begin to de- place. As the loss ratio comparison (gross loss to velop. However, in a mandatory insurance environ- annual premium) of Figure 1 shows, the EQE-PREP ment, the value of portfolio assessment may be in program loss ratio is about one-third of the industry buying excess reinsurance, planning post-disaster average. The numbers are further skewed because support, etc. we estimate that the EQE-PREP premiums are about

220 Peter I Yanev

4500 4500% 4000 3500 3000 2500 2239% 2074% 2110% 2000 1755% 1500 1333% 1000 618% Loss ratio (percentage) 500 0 EQE-PREP Insurer 2 Insurer 3 Insurer 4 Insurer 5 Insurer 6 Insurer 7

EQ MARKET SHARE 0.70% 23.40% 3.80% 11.80% 12.90% 1.80% 3.40% LOSSES (millions) 21.0 2530.0 900.0 1300.0 1500.0 165.0 240.0 EQ PREMIUM (millions) 3.4 122.0 20.0 61.6 67.0 9.4 18.0

Notes: 1. Commercial premiums and losses included. 2. Some premiums do not include automobile lines (i.e. “20th Century”)

Figure 1: Northridge earthquake loss ratios as of 27 January, 1995

Coverage design. The relative success of the EQE- The California Governor’s Office of Emergency PREP program is partly due to careful design of the Services (OES) retained EQE immediately following offered coverage — including such features as a the earthquake to estimate the total monetary value stand-alone policy, no frills coverage (such as of property damage from the earthquake. We various minor appurtenant structures or specific estimated, within 36 hours of the event, that value to types of contents), and a high deductible, also called be somewhere between US$15 and $20 billion. That “excess” in New Zealand. The policy, in effect, is estimate agrees very well with the current estimated designed to be a disaster policy, and to come into direct loss of a little more than US$20 billion. effect only if serious damage occurs. Insured loss in Northridge: estimated Even with a loss ratio one-third of the industry versus reported average, our losses dramatically exceeded our expectations. Based on experience with 60 earth- While loss-estimation technology provided an quakes, I expect that the same factors will come into accurate estimate of total property damage, the play after the scenario earthquake for Wellington. picture is different regarding estimates of the insured loss. Table 1 presents some of the best available The epicentre of the Northridge earthquake was information regarding some of the larger reported beneath the San Fernando Valley of Los Angeles, industry losses. radiating seismic energy almost directly at the buildings and structures on the ground surface. The For Northridge, these losses are clearly very large result was unusually high ground-motions, with peak and represent a significantly larger fraction of the ground accelerations approaching near record levels total damage than industry experts expected. That is, for sustained ground-motions in a populated area. since earthquake coverage is typically only accepted Accelerations approached 1g at several locations in by a minority of insureds, with substantial deduct- the valley. Comparable accelerations would be ibles, the common wisdom is that an earthquake’s expected in and around Wellington in the event of a insured losses would normally be a modest fraction magnitude 7.5 earthquake. The acceleration in Kobe of total losses, compared with other hazards like was about 20 percent lower. hurricane or conflagration (where insurance coverage is often almost total). That insured losses are

221 Wellington After the Quake about 50 percent of the total loss in the Northridge to overcome these shortcomings through direct event has come as something of a shock and has estimation of damage and insured loss. Nevertheless, very dire implications for the industry should a truly loss-estimation technology fell short for this event great earthquake occur in California or other regions because of several factors. of the world where coverage is high. Factors in underestimating insured loss In the confusion of the days following the North- in the Northridge earthquake ridge earthquake, there was a natural desire to understand the event’s financial implications for the Loss-estimation technology involves analysis of insurance industry. Several estimates were published hazard (seismology and geology, in the case of by various consulting organisations, ranging from a earthquakes), vulnerability and value at risk, all of low of US$0.6 billion, to a high of US$2.3 billion. which are uncertain to varying degrees. Within these As time went on, not only did the reported claims three aspects, there were a number of factors increase, but so did the estimates. EQE’s 18 January contributing to the low initial estimates of insured estimate was based on the statewide average per- loss. Unless carefully studied and well understood, centage of personal and commercial properties with the same factors will contribute to underestimating earthquake coverage (about 25 percent). Shortly predicted or actual losses, should the Wellington thereafter, when EQE employed the Los Angeles scenario earthquake occur. These factors and their regional average of 35 percent and made minor relative impact on the overall estimates included the technical corrections (e.g. earthquake magnitude following: increased from the initial M6.6 to M6.7), the estimate was increased to ranging between US$2.5 Inaccurate initial seismologic data. The event was billion and US$3 billion. In April, A M Best issued initially estimated at M6.6, which was corrected an estimate of US$4.7 billion (US$5.3 billion, several weeks later to M6.7, and the epicentre including loss adjustment expenses), based on a 96 location was initially placed somewhat farther north percent response rate survey of 148 companies, and than it actually was. These are typical changes in estimated that this could grow to as much as US$6 earthquake parameters following a strong earth- billion, including loss adjustment expenses. Also in quake. The effect of the magnitude change was April, Property Claim Services (PCS) estimated minor. However, the location correction placed the US$4.5 billion, 70 percent of which was from earthquake more directly under the populated area personal lines and 28 percent from commercial lines. and closer to central Los Angeles, and had a signifi- Finally, the California Department of Insurance cant impact on estimates. reported on 18 April that its March Data Call had indicated an industry loss of US$4.7 billion. Losses, Ground motion estimation. In simple terms, earth- now about a year later, have grown to more than quake faults can be grouped as (a) moving sideways US$11.2 billion and will be larger. to each other (strike-slip), (b) moving toward each other (thrust or reverse), (c) moving away from each While the initial estimates were substantially less other (normal) or (d) combinations thereof. Most than the current reported insured losses, several faults in California, as well as the Wellington fault, observations are relevant and applicable to the are predominantly strike-slip, and initial loss Wellington scenario. Firstly, loss-estimation tech- estimates were based on ground motions calculated nology and the traditional method of extrapolating assuming strike-slip faulting. Thrust faulting such as initial reported claims produced about the same in the Northridge event, however, has been observed results (and both were substantially less than the only recently to produce earthquake motions signifi- actual losses). Secondly, loss-estimation technology cantly greater than in strike-slip events of compara- was very responsive, providing insured loss esti- ble-magnitude. The Northridge earthquake produced mates (as well as the damage estimate for the the highest ensemble of ground motions ever California Governor, which was used immediately to recorded in a large urban area. The result was a support a request to the US Congress for relief major underestimation of ground motions in the funds) within one or two days after the event, while initial estimates. Estimates were low because neither the traditional method took much longer. Traditional the thrust versus strike-slip nature of the event nor methods based on extrapolating early claims natu- the fact that this particular thrust event was anoma- rally involve a time lag and, therefore, potentially lously high was recognised. This underestimation of substantial error. Loss-estimation technology seeks ground motion led to significantly low estimates of

222 Peter I Yanev the initial losses. Up to this time, we do not have know that more than a few homes had a less than 10 good strong-motion data from the Wellington area percent earthquake deductible. The effect of this is portion of the Wellington fault. Since the fault difficult to assess, but is probably minor to moder- appears to have thrust motions associated with it, it ate. This problem is discussed further later on remains to be seen what types of ground motions because of the special problems due to the very low will be generated in the scenario event. deductibles for homes covered exclusively under the policies of the EQC of New Zealand. Underinsurance. Underinsurance (which effectively lowers the deductible) is a common problem in all New damage data. Most of the loss estimates were kinds of insurance, often resulting in underestimat- based in part on a compilation of expert opinion ing losses. This was a significant problem in the about earthquake vulnerability of various kinds of 1991 Oakland hills, California, fire, as well as in the construction (based on a study by the Applied Northridge earthquake. Besides the usual problems Technology Council of California in 1985, ATC- of the insured value not keeping up with inflation, a 13), with little empirical verification. Even when significant problem in Northridge (and in the 1991 significant effort had been expended on collecting fires) was the cost associated with hillside construc- real data on building seismic vulnerability, such as tion. Because, as in the Wellington area, the San by EQE in its numerous post-earthquake damage Fernando Valley is ringed with steep slopes, a surveys, the relevant events that had occurred paled substantial number of affected homes had above- in comparison to the sheer number of buildings average repair costs. High repair costs resulted from affected in the Northridge event. While many of the the difficulties of working on steep slopes as well as kinds of damage came as no surprise, certain types slope failures causing above-average damage, of steel buildings were revealed for the first time to particularly to foundations, which would have had have significant earthquake vulnerabilities, which little or no damage had they been on level ground. had been previously unsuspected. A great number of the taller buildings in Wellington employ a framing Adjusting practices. Adjusting practices such as system called ductile-concrete-frame. The system paying for entire new interior finishes when there is has not yet been tested adequately under very strong relatively minor cracking, or paying for a chimney to ground motions, and it remains to be seen how this be rebuilt as structurally reinforced, as mandated by type of new construction performs under real, strong the building department, when the unreinforced and long ground motions. We could have another chimney is only cracked (i.e. costs to comply with surprise. increased code requirements) may have played a significant role in insurance claims being larger than Another aspect that had not been previously appreci- estimated. That is, a deficiency was found in most ated was the hidden nature of earthquake damage. current loss-estimation technology algorithms in that That is, while fire, flood or wind damage is essen- they estimate actual damage rather than insured tially surface-acting and thus readily apparent on payment. The overall impact of this aspect is inspection, earthquakes affect mass. The result is difficult to assess, but ranges from moderate (in that interior and initially hidden parts of structures commercial lines) to perhaps major (in personal may be damaged, even though the exterior is lines). undamaged. Insurance adjusters are less experienced with this type of phenomenon. Examples of hidden Deductibles. Not only did adverse selection exist to damage were in residential homes (cracked wall a greater than recognised degree, but a number of studs behind gypsum board, broken concrete slabs homes had a less than 10 percent deductible on their beneath carpeting) as well as major commercial earthquake coverage. For decades, earthquake cover buildings, where steel columns were badly cracked. was offered in California with a 5 percent deduct- In these commercial structures, the building gener- ible. Beginning about a decade ago and accelerating ally looked fine, and the damage could not be with the 1989 Loma Prieta earthquake, industry observed until interior finishes and fireproofing had practice tended to shift away from a 5 percent to a been removed. Fifteen months after the Northridge 10 percent deductible. Data on the percentage of event, in March of 1995, claims are still being filed homes with a less than 10 percent earthquake because of leaking roofs that may or may not have deductible were not widely available or used in the been damaged by the earthquake of January 1994. initial loss estimates, which appear to have been all based on a universal 10 percent deductible. We now

223 Wellington After the Quake

While the hidden nature of the damage does not While there is some uncertainty about the line of explain the total insured loss, it does explain why perfect agreement, the overall agreement is excel- estimates have continued to increase with time. The lent, with the total estimated losses being within 10 overall impact on total insured losses is difficult to percent of those incurred. determine, but is probably moderate to major. More importantly, the Northridge event offers an excellent Based on this comparison, we can identify (on a opportunity to collect damage and vulnerability data, preliminary basis) that the primary factors causing which the insurance industry, including that of New the initial estimates of insured losses to be much Zealand, should not miss. lower than those incurred were (a) the very intense ground motions observed in the Northridge event; Short-term inflation. In April 1994, A M Best and (b) the poor understanding, at the time, of the reported that two-thirds of all claims had already concentration of values at risk (i.e. not recognising been settled (however, perhaps not two-thirds of the existing adverse selection). dollar amount). Pressures to settle claims inflate costs because of short-term labour and materials David McCormick, one of the senior structural shortages, whereas most loss estimates may be based engineers in our San Francisco office, recently wrote on more typical labour and materials costs. Early a brief article for an in-house publication, concern- reports indicated that this effect may have increased ing his experiences in adjusting losses after the repair costs by as much as 25 percent for personal Northridge earthquake. Many of the ideas expressed lines, but this effect should not have impacted all above reflect experiences such as his, so this article claims, so that the overall impact is probably less. is attached as Appendix 1. The impact is estimated as minor to moderate. What the impact will be to an area such as Wellington Deductibles (Excesses) under a very large earthquake remains to be seen. The ongoing scenario in Kobe may provide valuable The various problems of deductibles that we have information. However, that scenario is also different, experienced in earthquakes in California can be as Kobe is only a small part of the much larger applied to the Wellington scenario. As discussed Osaka metropolitan area. above, deductibles in the USA for single-family residences are now typically in the 10 percent range. The text above attempts to identify factors that In the aftermath of the Northridge earthquake, might have played a role in the initial estimates of higher deductibles are being offered at a reduced insured loss, based on loss-estimation technology, premium. It took an industry disaster to convince the being substantially less than what was actually individual companies that earthquake insurance sustained. A precise understanding of which of these should, in effect, be disaster insurance and not a factors was most crucial to the underestimation conveyance for trading dollars to pay for minor requires a detailed analysis (currently under way). However, some insight as to which factors are most important has been gained through our work for individual companies.

Figure 2 shows, for example, a comparison, by zip code, of losses incurred by a large insurer (“Company X”) in the Northridge event, with EQE’s estimate of losses using loss-estimation otal loss incurred technology. These estimates are after- T the-fact, and are based on the actual ground motions experienced in North- ridge, and Company X’s actual portfolio. As such, they filter out three of the factors identified above: (a) inaccurate Estimated total losses after deductibles initial seismologic data, (b) ground Figure 2: Actual versus loss estimation technology-based motions, and (c) adverse selection. estimated losses for Company X, Northridge Earthquake

224 Peter I Yanev damage and/or home remodelling in the midst of a order to promote the strengthening of older and/or disaster area. weaker homes. Lenders are also beginning to require inspection of homes for earthquake hazards when The NZ$200 deductible applied by the EQC is transferring title. All of this is difficult and perhaps ridiculously low and is an invitation for problems in impossible with trivial deductibles. I also believe the midst of a disaster. Our experience in California that full insurance is counterproductive and discour- indicates that at this level of deductible almost all ages safety awareness. To me, the Armenia earth- affected property owners will submit claims. The quake of 1988 (M6.9) is the best example. In effect, current estimates for claims in the event of the all building stock in the town of Spitak was insured Wellington scenario earthquake are low. The under the old Soviet system of state ownership, yet scenario states that over 43,000 houses, which is almost all of it collapsed, with very high life losses. about one-third of the total number of houses in the The concept of risk was not understood; it was not Wellington area, have damage. EQC expects a even considered — in a known earthquake area — further 25,000 claims from outside the Wellington because someone else would rebuild. region, on the basis of the total of about 235,000 homes outside the Wellington region that will be If ever there is an insurance cover situation needing affected in some manner by the earthquake. Further- a meaningful deductible (10 to 15 percent or more of more, EQC’s planning is based on a similar earth- the home rebuilding cost), it is earthquake insurance. quake being the maximum credible event of about 100,000 claims (Middleton, 1995). Our data suggest Loss control that, given the very low deductible, there may be more than 125,000 claims in the Wellington area, Loss control is practised extensively in the area of plus 25,000 to 75,000 from outside the area, result- fire protection. Its application, while obvious, is ing in 150,000 to 200,000 claims. Most of these much less prevalent in the area of loss control for claims will, in effect, be nuisance claims, resulting earthquakes. Fortunately, Wellington and New in high adjusting costs and wastes of valuable Zealand are among the leading forces in earthquake resources in the midst of the disaster, when these hazard mitigation and, therefore, loss control. resources are stretched thin or may be unavailable. Numerous buildings in Wellington, and now some of the infrastructure, have been and are being In the Northridge event, our claim and adjusting strengthened to make them more resistant for future costs ran at about 5.5 percent of the total sum earthquakes. claimed. The cost was increased somewhat by the attempts of homeowners to pad the damage to get it Loss control for earthquakes needs to become, for over the high deductible of 10 percent in order to the insurance industry, as common as loss control receive at least some compensation. With a NZ$200 for fires. The principles are the same — but the deductible, that problem will not exist. Instead, a earthquake issues are much more complex. Our large percentage of the claims, probably much more experience in California is that loss control works. than half, will be minor but will consume about half Numerous older residential, commercial, and of the attention of the EQC and its contractors. industrial structures and key equipment systems and contents had been strengthened to newer seismic I believe that higher deductibles for New Zealand, criteria and were subjected to very strong ground say 10 percent, will actually be very beneficial for motions in the San Francisco area in 1989 and all involved. Low deductibles discourage homeown- particularly in the Los Angeles area in 1994. In just ers from doing anything to reduce their risks. The one example in the Northridge area, a roughly recent higher deductibles and the lowered availabil- US$10 million investment in the evaluation and ity of earthquake insurance in California have strengthening of a large brewery (worth roughly spurred quite a lot of retrofitting (strengthening) of US$1.3 billion) led to a probable avoided loss of weaker properties — primarily the older housing more than US$0.5 billion and a trivial business stock that lacks some of the basic but simple features interruption of just four days. of earthquake resistance. Many small contractors in California now specialise in strengthening houses, The risk reduction, or loss control, programme that and the costs are quite reasonable. A more recent led to this success story was triggered by the lack of development is the involvement of financial institu- capacity for earthquake insurance in the late 1980s. tions. Some are offering more favourable loans in The resultant loss control work dramatically reduced

225 Wellington After the Quake the company’s needs for earthquake insurance and, Guam, the structure was repaired for about US$2.5 therefore, its long-term expenditures on insurance. million, and was actually upgraded to the current Resources can now be diverted to more loss control. code requirements for seismic loads after it had been We have witnessed this process now for about 15 condemned and scheduled for demolition — it years in California. The huge losses from the would have been an insured loss of more than Northridge event have now spurred many more US$20 million. The owner’s engineers and the companies to increase their loss-control activities, adjuster’s engineers had agreed that the property was particularly for industrial facilities and commercial a total loss. None of them was from an earthquake buildings. An industry is growing in the field of region and none had any reasonable experience with earthquake loss control. earthquakes — it took foresight on behalf of the insurance carriers, with whom we had worked The lack of adequate loss control was painfully before, to bring in specialists (structural and earth- obvious in the Kobe area. Little loss control was quake engineers) who had designed similar build- practised in the area. Very few, if any, older buildings (in California), had repaired similar damage ings and other structures had been strengthened, before, and had upgraded similar buildings. despite the lessons from California. The results were devastating, particularly for buildings and other Adjusters and their insurance clients need special- structures constructed in the 1950s to 1970s. The ised training to recognise when they need assistance worst performers were low- and mid-rise reinforced- with earthquake damage. The sophistication of the concrete buildings, and particularly those on soft problem is beyond the normal qualifications of the soils. These, too, will be the worst performers in practitioners and that results in additional and Wellington. Under the stronger ground motions of a unnecessary losses. M7.5 earthquake, the damage will be worse than in Kobe, unless the practice of loss control is expanded Conclusion dramatically in the private sector. In this area, the brokerage community can and should play a major The effects of the future great Wellington earth- role. quake can be dramatically reduced if the insurance industry takes an active part in future loss control and in assessing and controlling its own risks. Large Major claims earthquakes in California and hurricanes in Florida Through EQE’s hundreds of post-earthquake and Europe and the resulting huge losses have projects, we have gained some interesting experi- forced the issues already in the USA and Europe. ence with major claims — particularly for large reinforced-concrete buildings, large and overly The New Zealand insurance industry still has the flexible steel-framed buildings, and industrial opportunity to learn the easy way from the problems buildings. and mistakes of others, before the Wellington fault or a myriad of other faults let loose their stored Following a major earthquake in a modern metro- energy. Loss control and intelligent risk manage- politan area, the claim-adjusting community is ment and underwriting can do that. overwhelmed by the magnitude of the task at hand. There are two reasons: (a) most adjusters do not References have experience with sophisticated structural damage, and (b) most engineers also do not have Middleton, D. 1995. “The Earthquake Commission’s adequate experience with real earthquake damage. preparations for disaster.” Paper presented at EQC conference, Wellington, 27-29 March 1995. We have now seen this problem in four recent major events — the 1989 Loma Prieta (M7.1), the 1993 Guam (M8.1), the 1994 Northridge (M6.7) and the 1995 Hanshin (M6.9) earthquakes. Major buildings in each earthquake were judged to be irreparably damaged and were scheduled to be demolished. Some were demolished when, in fact, they could have been repaired at a fraction of the cost of new construction. For example, in just one hotel in

226 Peter I Yanev

Appendix 1: Article from an insurance company in-house newsletter

Kemper Insurance recruits SF E&D for the long term

Dave McCormick

EQE International, San Francisco

Soon after the Northridge earthquake, EQE received building trying to determine whether the damage a telephone call from Kemper Insurance asking if we was serious enough to warrant substantial repairs. would agree to provide the company with an engi- During the aftershock, the building swayed horizon- neer to help its adjusters for two weeks. I was tally about 6 inches, with all of the deformation volunteered, and jumped on a plane to Burbank. occurring at the bottom floor where the damage was Upon arrival, I was greeted by about 30 adjusters concentrated. Upon removing some stucco, I saw from all over the country who had taken over the that many of the studs had split. Best Western in Glendale. They gave me a T-shirt, a jacket and a cellular phone and made me an official In another case, I was in the crawl space under a member of the CAT(astrophe) Team. Nearly one house when an aftershock hit. The house had been year and more than 20 flights later, I am still assist- sliding down the hillside before the earthquake, and ing adjusters with claims, although the initial I watched as the crack in the ground under the house emphasis has shifted from commercial (warehouses actually got wider and wider. Still another time, I and malls) to residential properties. was on top of a tilt-up getting some photographs of the partially collapsed roof when the aftershock hit. My primary charges were to verify that the observed Fortunately, the plumbing in the building was still damage was indeed caused by the earthquake and to working. propose conceptual fixes for the structural damage. It did not take long before my belief that wood- Understanding the damage I saw was not always frame buildings generally perform well in earth- immediately possible. For instance, several slab-on- quakes was changed. None of my previous earth- grade houses were observed to have horizontal quake reconnaissance trips prepared me for what I cracks on the side of the foundation around the saw, including virtually brand new houses that were entire perimeter. It was only once repair work was total losses. Many houses I saw that were 20 or 30 begun that we determined the cause. The contractor miles from the epicentre had substantial damage. had poured the footing, and then applied the plastic vapour barrier for the floor slab, and had extended it Upon my return, I immediately changed the deduct- over the footing, thereby creating a plane of weak- ible on the policy for my home from 10 percent to 5 ness. Poor construction quality was often the source percent. I also sought code coverage, so that any of major damage in the houses that I visited. work required by post-earthquake changes in ordinances would be covered. Many insureds did not Some of the sadder cases of damage were those understand their policies, nor did they understand instances where individuals had reacted to the recent that optional coverages were available. The intro- fires in the Los Angeles area by replacing their wood duction of several ordinances by the City of Los shake roof with heavy clay tile roofs. While their Angeles made house repair work very challenging in neighbours’ houses were virtually undamaged by the a number of cases. Prior to the earthquake, I had not earthquake, some of these houses, where the owner given much thought to how a crack in a stucco or had tried to do the right thing, had heavy and lath and plaster wall can be “structurally” repaired. sometimes total losses.

The aftershock activity resulted in the need for In general, the work with Kemper was very instruc- repeated surveys of the same losses. Cracks kept tive. I learned that chimney damage is not always growing in length and width. Some of my most possible to detect by visual inspection. In virtually memorable experiences were during aftershocks. In every case where we ordered a smoke test or video one case, I was standing next to a two-storey survey, cracks were observed in the liner.

227 Wellington After the Quake

I was left with the impression that the insurance industry needs to change the way it does work. The industry is trying to be fair, which is more than can be said for many of the insureds. Minor cracks in plaster led to totally new paint jobs for entire rooms. If it is difficult to determine whether a crack is new or old, it is typically assumed to be new. An amaz- ing number of new driveways were poured after the earthquake. Is this really how insurance dollars should be spent?

228 Christopher Henri

Role of insurance companies in disaster recovery

Christopher Henri, AAII

Insurance Council of Australia Ltd, Sydney

This paper draws from recent experience which the insurance industry gained from the Newcastle earthquake of 1989 and the Cessnock earthquake of 1994, but also focuses on some of the major difficulties which confronted the industry with other disasters like the March 1990 hailstorm, the January 1991 thunderstorm down blast (both in Sydney), and the extensive bushfires in New South Wales in January 1994. All of these involved tens of thousands of individual claims and hundreds of millions of dollars in settling them.

The Insurance Emergency Service (IES) Australia is perhaps best known for its response to tropical Cyclone Tracy’s destruction of Darwin in 1974 and the Ash Wednesday wildfires in South Australia and Victoria in 1983, although it actually traces its origins to several natural disasters in 1961.

Its contribution to the affected community is to ensure that domestic and small business claims resulting from designated disasters are speedily and capably assessed and ultimately settled with the utmost convenience to all concerned. This is done by establishing an industry-coordinated response organisation that also establishes contact with government at all levels and represents the industry on any relevant external emergency committee. The IES also ensures accurate information flows to the media, insurers, governments and government agencies, and other interested parties, and maintains disaster statistics for use by insurers and other professionals.

Its experience, including problems associated with conveyancing of property, is related to the insurance implications of a devastating earthquake in Wellington.

The Insurance Emergency Service (IES) activated by ICA’s chief executive to respond to a in Australia designated disaster, it is the role of the state coordinator to bring together teams of experienced claims The Insurance Emergency Service (IES) is a disaster managers to cope with the high number of claims response scheme organised and managed by the that are lodged within the first few days or weeks Insurance Council of Australia (ICA) under a after the event. Similarly, the state chief adjuster tripartite agreement; the two other partners are the organises the loss adjusters and arranges for work to Chartered Institute of Loss Adjusters and the be allocated to them. Australian Institute of Loss Adjusters. It has been mainly developed to assist householders, farmers The IES has four phases of implementation, each and small commercial insureds, as a service to attend building on the previous phase: to claims that may arise in an insured disaster situation. Larger commercial insureds are usually • Phase A establishes the IES Community Assist- well looked after by the major loss adjusting firms. ance Program, which communicates with disaster A disaster situation may arise that does not involve victims by way of the media and community an insurance industry response, for example the meetings and establishes lines of communication effects of drought or pestilence, and, in most in- with government agencies and relief centres. stances, flood waters. • Phase B establishes claims reporting centres which receive initial advice of claims and The administration of the IES consists of a national transmits these on to the relevant insurers. coordinator and national chief adjuster, together with their deputies, and is supported by a national IES • Phase C progresses to the point where work is committee. In each of the states and territories of allocated to loss adjusters. However, having been Australia, there is a regional coordinator, a regional assigned a job, the loss adjuster then negotiates chief adjuster and a regional IES committee headed direct with the insurance company to effect by ICA’s regional manager. When the IES is settlement of the claim.

229 Wellington After the Quake

• Phase D is the full operation of the IES and truly national agreement was drawn up early in involves the establishment of a central claims 1979. bureau, where loss adjuster’s reports are checked and recommendations made to the insurers. Three disaster studies

A little known fact about the IES is that it was first In the Australian experience over the past 20 years, established in Western Australia in 1961 due to two three natural disaster events have had a major impact events occurring at the same time. A large bushfire on the general insurance industry because of their devastated the southwestern portion of the state and unique circumstances. They were the 1974 tropical a cyclone struck at Onslow to the north of Perth and Cyclone Tracy at Darwin, the Ash Wednesday created floods at Carnarvon. It was natural for loss bushfires of 1983 in Victoria and South Australia, adjusters to opt for work in the southwest region, and the 1989 earthquake at Newcastle. Although close to Perth and in far more pleasant climatic there have been many other events which have been conditions than farther north. To overcome the quite important from the disaster response point of potential problem, a meeting of insurers and loss view, such as the tropical cyclones Althea, Winifred adjusters was called and agreement reached to and Aivu in Queensland, and severe storms such as mobilise the loss adjusters and allocate them to the those which struck Brisbane in January 1985 and in two devastated areas. Sydney in March 1990 and January 1991, these three produced the greatest challenge for the insurance It is a remarkable achievement that the man who industry and it is best to examine these events for conceived of the idea of the Insurance Emergency their problems and for the solutions found. Service in 1961, at that time the Western Australian state manager of a large insurance company is still Tropical Cyclone Tracy 1974 — Darwin, involved with the IES today. Mr Les Lester is the Northern Territory national coordinator and at 80 years of age has Tropical Cyclone Tracy was a small but very intense accumulated a vast experience in dealing with cyclone with a recorded surface wind speed of 217 disasters; the most notable being tropical Cyclone km/h. It moved over Darwin at a slow speed of 8 Tracy in Darwin in 1974, the Ash Wednesday km/h for about five hours, commencing at around bushfires in South Australia and Victoria in 1983 1:30 am on Christmas Day 1974. It prescribed a and the Newcastle earthquake in 1989. zigzag path over the main city area and in its wake While the first Insurance Emergency Service can be left a city almost totally destroyed. Some 23,000 traced to Western Australian in 1961, there was a people, or about 75 percent of the population, had to significant period of time, in fact some 12 years, be evacuated to southern cities. Ten thousand before another major disaster occurred and, with no dwellings were destroyed or substantially damaged, opportunity for the IES to be activated in those as well 10,000 cars and some 750 caravans. Alto- intervening years, the concept faded. When Cyclone gether, including commercial loss of profits and Tracy struck Darwin in 1974 there was no formal marine and aviation claims, the insured loss came to national agreement in place to deal with that emer- AUS$217 million in 1974 dollar terms. This amount gency, but an ad hoc agreement was put together would approximate AUS$760 million in 1995 quickly and worked extremely well under difficult dollars. circumstances. For several years afterwards, inter- Notwithstanding the large insurance payout for this ested groups analysed how the insurance industry event, it is important to recognise the impact that the could respond to cyclone damage in a large coastal appalling degree of under-insurance had on the city or town, and there was some preparatory overall insured loss. The average sum insured on thinking towards the formation of a formal ongoing dwellings in 1974 was AUS$20,500 and this amount insurance emergency service. When disastrous fires tied in closely with the average indemnity value of ravaged a large part of the western districts of about AUS$20,000. However, the severe effects of Victoria in 1977 and another ad hoc arrangement inflation induced by having nearly all labour and was worked out to coordinate the insurance industry materials flown in or transported overland or by sea and loss adjusters, the Board of Directors of the to Darwin, and new building standards, caused the Insurance Council of Australia decided to establish a replacement costs of dwellings to rise sharply, to formalised Insurance Emergency Service. The first some AUS$45,000.

230 Christopher Henri

The insurance industry’s maximum probable loss been evacuated to various state capital cities in (MPL) assessment for cyclone damage to a northern southern Australia, it was often difficult to track city prior to December 1974 had been around 20 evacuees to their temporary homes. Nevertheless, percent. Tropical Cyclone Tracy reversed that view; over a period of months all claimants were located in fact, the insured destruction and damage revealed and the claims settled by the insurers. the MPL was of the order of 80 percent. Loss adjusters from around Australia were brought The remoteness of Darwin, the extent of destruction, to Darwin in teams of some 20 at a time. They were and the climate produced a very difficult set of replaced on a regular basis after periods of service of circumstances with which the insurance industry had three to four weeks. Many retired loss adjusters to deal to make the claims settlement process offered their support and handled paperwork for effective. those in the field. As well, they helped organise replacements. Specialist adjusters were also brought Access to Darwin after the cyclone. In the days in to handle the commercial, marine and aviation immediately following Tracy’s destruction of claims. Darwin, complete Government control was essential. It was a stage when firm control was required, but The assessment of cyclone damage requires experi- tempered with understanding and consideration. It ence beyond that obtained in normal claims settle- must be remembered that most people who remained ments. For example, a dwelling may have obvious in Darwin were there to do a job, but they repre- damage, such as having had its roof destroyed, but sented no more than about 25 percent of the normal may otherwise appear to be intact and, therefore, population of the city. considered only to be a partial loss. But, on closer inspection by a building consultant the whole Gaining access to Darwin was very difficult. The dwelling could well be a total loss due to the frame lack of federal government cooperation forced the being twisted beyond repair. original assessment party consisting of three chief executives to hire a plane to get into Darwin. A few Assessors were organised into groups on a geo- days later, the insurance industry’s disaster response graphical basis and it was agreed to dispose of as coordinating team found themselves in the same many total loss claims as possible in the worst hit position with no priorities from the Royal Australian areas. Total losses, either in fact or due to under- Air Force and no assistance from government insurance were relatively easy to handle, provided departments. This lack of cooperation was com- that all relevant information was supplied by the pounded when the RAAF Control at Darwin refused insurer and the lot could be identified. the party a permit to land, and it was necessary to land near Katherine, 300 km south of Darwin. Proper identification of the site was of paramount importance. It was the assessor’s responsibility to Once in Darwin city, however, attitudes were ensure the lot number was correctly identified and entirely different. The federal government had usually a double check was made to ensure the appointed an emergency committee, which was well description of the dwelling agreed with the descrip- organised and used its authority with efficiency and tion of the wreckage. consideration. Its members gave the insurance industry’s coordinating team complete cooperation, Homes that were damaged by the cyclone produced and it is worthwhile noting the benefit of having their own difficulties, mainly due to: people in authority who are able to make decisions • delay in producing the new building code; on the spot. •temporary repairs only being allowed; Assessment of cyclone destruction and damage. •shortage of materials even to carry out the Tropical Cyclone Tracy probably embraced all of smallest of temporary repairs; and the difficulties an insurance industry could ever expect to face — all in one event. The damage was • dwellings being declared unfit for habitation or by far the worst that has been experienced in restoration by the NT Administration’s Engi- Australia and the assessment process was aggravated neers’ Department, contrary to the loss assessor’s by Darwin’s isolation and subsequent long wet opinion that the building could be repaired. season. Because the majority of the population had

231 Wellington After the Quake

Motor vehicle and caravan claims. Special consid- food and turned a blind eye to people helping eration had to be given to motor vehicle and mobile themselves. caravan claims. In Darwin, there were only five motor body repairers active to some extent but in no Requisitioning continued until 3 January 1975 way capable of coping with some 10,000 motor without records being properly maintained, but from vehicles and 750 caravans that were either destroyed that date, the emergency committee limited the or extensively damaged. authority to requisition and agreed on proper records being kept. Up to this time it had been impossible to Consideration was given to transporting damaged tell what had been requisitioned and what had been vehicles south, but the cost by road and rail was very pilfered or otherwise lost, and insurers had little high and in any case the wet season precluded the choice but to accept the loss as part of claims. use of this method for several months. Shipping out of Darwin was limited to one ship per month and the Building materials were also commandeered by the most that could be sent south by this method was administration, including all new materials that came 120 vehicles per month. It was necessary to assess into Darwin after the cyclone. By 6 January, agree- all damaged vehicles as quickly as possible, because ment had been reached between the insurance the whole of Darwin was covered in salt water spray industry’s central claims office and the emergency during the cyclone and vehicles were deteriorating committee, which allowed for applications to be rapidly. A separate team of motor vehicle assessors submitted to import materials for temporary repairs was appointed and a compound set up to accept to minimise insurance losses. damaged but movable vehicles. They cooperated with the police, who had taken many destroyed and The Darwin Reconstruction Commission. On 30 badly damaged vehicles to their own compound. December 1974, the federal government established a statutory authority to plan, coordinate and carry Many motorists continued to drive their vehicles in a out the reconstruction of Darwin city; the authority damaged condition, when under normal circum- was to have an initial life of five years. To avoid stances they would not have been allowed on the delay, an interim commission was appointed, road. Fortunately, a large number of vehicles that pending the drafting and passage of the necessary were roadworthy had been driven south in the legislation. By 6 January 1975, the interim commis- evacuation and many of the motor vehicle claims sion had agreed to establish a citizens advisory were settled in other places. council to keep it informed of community requirements and reactions. It also arranged for the produc- While total losses presented no real problem, tion of a new building code for the city. Because of partially damaged vehicles certainly did. There was the lack of legislation, the interim commission had no great difficulty in obtaining repair quotes, but it no powers but depended on cooperation of other would have been many months before the vehicles government bodies, and with this collaboration was could have been repaired. The effects of inflation able to start its planning. On 28 February 1975, the meant that a repair quote bore no resemblance to the Darwin Reconstruction Act 1975 received assent actual costs of repairs many months later. The and the Darwin Reconstruction Commission was majority of claims for damage to vehicles remaining formally established. in Darwin were settled for cash, according to the body repairer’s quote, and the owners subsequently The Commission based its assessment of the require- ran their vehicles into the ground. ments of the reconstruction programme on a number of assumptions, of which the most important to the Caravans required specialised repairs and it was insurance industry were: necessary to bring to Darwin experienced body •that by 1980 the expected population of Darwin builders to cope with the number of caravans whose would be in the vicinity of 56,000; owners opted for repairs. •that the revised building code would apply to all Federal government action. Immediately after the new structures and restored houses; and cyclone, the government-appointed emergency •that the private homeowner would have limited committee requisitioned all building materials, ability to finance the cost of rebuilding the house generators and other items necessary to maintain as and the private sector would be unable or much of the city as possible. They also requisitioned unwilling to enter into financial commitments

232 Christopher Henri

because of high costs and uncertainty as to the dumped as worthless. There were differences of future of the city. opinion between insurers and representatives of overseas reinsurers with respect to salvage of The second and third assumptions in particular were dwellings. In most cases, the extent of under- of interest to insurers. The new building code was insurance was such that the problem was purely established after tropical Cyclone Tracy, and its academic. application with respect to extra cost provisions was of concern to insurers as they considered any extra However, it is interesting to note that many thou- cost flowing from the new building code was not sands of concrete posts on which dwellings had been part of the normal domestic claim. The third as- constructed remained standing after the cyclone. sumption, of course, highlighted the problem of Insurers and loss adjusters felt that unless they could under-insurance. be used in the restoration of the dwelling, they had no value, and as the new building code required The cost of rebuilding was aggravated by the delay dwellings to be built on concrete rafts on the ground, in revising the building code, lack of readily avail- the value of concrete posts were not taken into able labour and materials, and the steady rise in account in the settlement of claims. The reinsurers’ costs during the period until buildings were com- representatives initially took the view that they had a pleted. salvage value even though they had to be collected and sent somewhere where they could be used. This The commission decided that its planning should was not a practical solution, and eventually the take the form of policies rather than the town plan reinsurers’ representatives agreed not to take the used prior to tropical Cyclone Tracy. It was believed value of this salvage into account. that town plans were inflexible and, in the case of Darwin, rapid growth would make such a plan Trade risks. Although it was apparent some trade ineffective for the future. Included in its policies was risks were abandoned by their owners, it was a new element — the definition of coastal tidal surge difficult to prove in view of the wholesale evacua- zones being those areas liable to inundation by the tion of the city. However, in one particular instance sea during a cyclone. The commission did not there was no doubt the premises had been aban- prohibit residents from rebuilding in these areas, but doned to the insurers, who because of doubts as to rather discouraged development. It did not provide the legal position did take over the salvage in a any resources to assist repairs or restoration in the endeavour to minimise the loss. two designated tidal surge zones. However, it did give consideration to additional assistance to private The attitude of management and staff of large homeowners to relocate elsewhere. department stores presented an interesting comparison. In one instance, the management and staff By May 1975, building contracts for some 1300 abandoned their store leaving it completely open to houses had been let, divided between four contrac- looting. In the other instance, the management and tors. The average cost of each house was estimated staff stayed to secure their store, locking all en- at AUS$44,600, subject to rise and fall clauses — a trances. figure that was more than double the average amount of insurance cover on houses at the time of Another aspect of under-insurance is also notewor- the cyclone. By June 1976, the population of Darwin thy. The retail and wholesale stores had stocked up was only 4000 short of its pre-cyclone figure of for Christmas and the wet season. In most cases, 49,500. By June 1977, 2355 new houses and flats insurances on stock had not been adjusted to reflect had been completed and the commission had the increased values. In one case, the build up in approved a further 500. A number of houses, not so stock had reached a value of AUS$70,000, whereas seriously damaged, were upgraded by a system of stock normally held had been AUS$15,000 to over-battening of their roofs that involved minimal AUS$20,000; insurance cover at the time of tropical work to the interior. Cyclone Tracy was only for AUS$15,000.

Salvage. In any other location, insurance losses Flying debris. An interesting phenomenon of might have been mitigated to a large extent by cyclones is that items found in a house may not recovery from salvage, but due to the isolation and necessarily belong to that house. This was particu- lack of transport facilities a great deal of salvage was larly the case with jewellery, but even included

233 Wellington After the Quake heavy items like refrigerators. The Darwin Travel ICA declared a state of insurance emergency for Lodge Motel had a Volkswagon Beetle embedded in both Victoria and South Australia. its third floor wall plus three other vehicles in its pool. A central claims bureau (CCB) was established at ICA’s head office in Melbourne and in the Royal The Ash Wednesday 1983 bushfires in Insurance Company’s building in Adelaide. In South Australia and Victoria addition, claims reporting centres (CRCs) were established in four townships in Victoria and four The bushfires commenced on 16 February and by 17 townships in South Australia; in most cases, they February were largely out or contained, although in were situated near to evacuation centres, but two of a few areas the fires kept burning in bushland and the CRCs were later relocated as they were found to forests until about 22 February. Temperatures were be too far removed from the affected area. By the well into the 40˚C+ and humidity was almost at zero afternoon of 17 February, loss adjusters were percent. Strong winds in many areas carried the fires making their way into the devastated areas. very quickly. In some areas, it was estimated that the across-the-ground speed of the bushfires exceeded No disaster event is going to produce a set of 100 km per hour. circumstances that enables the IES to operate with absolute efficiency and convenience. In the case of Because of the long drought in both South Australia the 1983 Ash Wednesday bushfires, many lessons and Victoria, there was a large amount of dry fuel on were learned that were either acted upon immedi- the ground to feed the fires. Probably the most ately or were recorded for future reference when the severe fire was in the area of the Cockatoo township IES was reviewed to further refine the claims in the Dandenong Ranges, which caused an im- response programme. mense amount of damage in a comparatively short period. It was estimated that the heat generated from Member insurance companies made claims staff that fire was not far short of the heat generated by available for the CRCs and the CCBs, but the the Hiroshima atom bomb blast. The loss of 76 lives, constant turnover of staff mitigated against the with more than 2000 people suffering extensive burn efficiency and continuity of effort. In consequence and smoke inhalation injuries, added an horrific of this, some consideration has been given to the dimension to the extensive property and livestock employment of claims staff who could be made losses. available for the whole of the expected period of any future disaster. The fires raged over some 1400 km, from the Clare Valley north of Adelaide to Mount Gambier in the Although management by improvisation will always south and across coastal areas and southern Victoria be a major feature in a disaster situation, one to the Dandenong Ranges east of Melbourne. Some important lesson learned from the 1983 bushfires 46 villages and towns and urban areas of Adelaide was that every effort must be made to get adequate were affected by the bushfires; 2179 houses were premises for CRCs to ensure that the administration destroyed and over 2000 other houses were dam- of loss adjusters is segregated from the reporting of aged. Many historic buildings were destroyed. claims by disaster victims. In this respect, it is Livestock losses were enormous, with some 264,000 essential that although the CRC may be under the sheep perishing and nearly 19,000 cattle. In addition, control of an insurance officer for the purpose of several hundred thousand sheep and cattle were left receiving and recording claims, there must also be a without feed. Three hundred and ninety three loss adjuster in charge of the adjusting team and that thousand hectares of bushland and state forests and team must be small enough to be properly managed. 19,000 km of fencing were burnt. Where possible each loss adjuster should be allocated claims in a defined area to obviate unnecessary Using 1995 dollar values, the insured loss totalled travel and to allow them to get a better understand- AUS$231 million for Victoria and AUS$63 million ing of the area in which they are working. for South Australia. By late afternoon on 16 Febru- ary, it was evident that there would be an extraordi- The paperwork associated with a disaster of the nary amount of destruction of property spread across 1983 Ash Wednesday bushfires type is enormous the two states and, to meet the large number of and adequate lines of communication between CRCs insurance claims anticipated, the chief executive of

234 Christopher Henri and the CCB are essential, even to the extent of The Newcastle earthquake, 28 December employing a courier service on a daily basis. 1989 While earthquakes and earth tremors occur in The South Australian Health Commission conducted Australia on a regular basis, it is infrequently that a survey of the 12 months following the Ash Wed- they affect populated areas. Insurance claims were nesday bushfires to ascertain the health and social submitted following earthquakes in Adelaide in impact on the communities. This survey clearly 1954 and in the Western Australian towns of showed that many people suffered post-traumatic Meckering in October 1968 and Cadoux in June stress disorders, characterised by reduced involve- 1979, and more recently at Tennant Creek in the ment in normal activities, with many sufferers being Northern Territory in January 1988. The Adelaide reluctant to consult with any professional person earthquake of 1954 was largely forgotten from about their condition. Typically, alcoholism and memory and only scant details were available to drug problems were evident, as were cases of mental draw upon for the insurance industry’s response to illness, hypertension and sleep disturbance. the Newcastle earthquake. Although traumatic for the communities involved the earthquakes at Meck- The important issue for loss adjusters and insurance ering, Cadoux and Tennant Creek were relatively claims staff is to recognise that when they are small events from the aspect of servicing claims and negotiating and consulting with disaster victims they the insurance payout. may be dealing with people who have acquired health problems as a direct consequence of physical The 1989 Newcastle earthquake presented the or mental deterioration occasioned by the event. insurance industry in Australia with the largest aggregate loss on record. Some 64,000 domestic and Very often it may only be the loss of a loved pet that 6000 commercial claims were lodged with insurance causes a distress disorder, which interferes with a companies for suspected earthquake damage to person thinking clearly and responding effectively to about 35,000 properties. The total insurance payout requests from the loss adjuster or claims staff for in 1995 dollar terms came to AUS$1.02 billion. information vital to the claim’s progress. Many complaints about the insensitive and inadequate Apart from the spectacular collapse of the Newcastle behaviour of insurance personnel can be eliminated Workers Club, with the tragic loss of nine lives, and by recognising potential or actual stress disorders. substantial collapse of a few other buildings in the Unfortunately, good work in this field is counter- commercial district, the full extent of damage was acted when the opportunistic element in the commu- not immediately apparent. In fact many insurance nity commences fraudulent activity against insur- claims were lodged months after the event and in ance companies; the natural response is to harden some cases several years later. For about a year after one’s attitude. the earthquake, new claims kept coming in, at a rate of between 300 and 400 each week. In its report, the South Australian Health Commis- sion found that the psychological and physical health From the outset, ICA’s assistant chief executive did of the bushfire-affected population was significantly not declare a state of insurance emergency, but the impaired by the experience of the disaster. Although IES was activated to the level of Phase 1, which some of the problems arose soon after the bushfire established lines of communication with Newcastle and were recognised and dealt with at the time, the City Council, the Police Service, welfare agencies majority continued for 12 months and many were and the media. identified or acknowledged for the first time only months after the bushfire took place. While the study The decision by ICA not to activate the full opera- indicates some deficiencies in the recognition and tion of IES, namely Phase 4, was based on a number management of the problems, it must be remem- of premises. Firstly, the initial indications were that bered that this was the first comprehensive study of the earthquake damage was moderate; although a total population affected by a major disaster, and at disrupted for a time, public infrastructure and the time only a limited knowledge existed of the services were largely unaffected. Secondly, Newcas- nature, extent and duration of the health and psycho- tle is Australia’s sixth largest city, with a population social problems that would arise in later months. of some 400,000 people and extensive resources; it is situated some 160 km north of Sydney and is easily accessible by road, rail and air. Thirdly, on the

235 Wellington After the Quake initial run of claims, most insurance companies Following an earthquake, seismologists, geologists, believed they could service their claims from either the authorities and the affected community ready their Newcastle or Sydney offices. themselves for aftershocks. In the case of the Newcastle earthquake loss-adjusting programme, The IES state coordinator, Mr Philip Reed, went to there were aftershocks of a different kind. Firstly, Newcastle on the day following the earthquake, there was the effect of the record rainfall in early made contact with the state emergency service and February, which complicated the adjustment of was taken on a conducted tour of the worst areas. earthquake claims and caused the reopening of For the first few days, he operated out of a motel, claims that had already been assessed. Secondly, on but later secured office accommodation for the IES 18 March 1990, a hailstorm that would ultimately Phase 1 operation at his own company’s branch cost AUS$300 million struck large areas of Sydney; office after it was agreed that the building could be 28,911 household claims and 8541 motor vehicle reoccupied. Having been recalled from annual leave, claims were lodged. Insurance companies and loss- ICA’s NSW regional manager joined him a few days adjusting firms had no alternative other than to pull later and commenced the process of holding industry back their troops from Newcastle to undertake the debriefing meetings and attending the series of assessment and servicing of the Sydney hailstorm business and community meetings organised by claims. With the continuing inflow of new claims Newcastle City Council and Hamilton Chamber of and reopening of old claims, the strain on the loss- Commerce. adjusting fraternity that remained in Newcastle became enormous. The final aftershock came in the Access to area and damage assessment. Damage form of a very severe thunderstorm that struck the assessment got under way immediately, with leading northern suburbs of Sydney on 21 January 1991. loss adjusting firms commencing operations for their Giant trees fell across houses, cutting them open as principals in the evening of the earthquake. NRMA easily as a knife cuts through butter. This event Insurance, the largest insurer of home buildings and produced 28,206 household claims and 3692 motor contents, with approximately one-quarter of the vehicle claims for an insured loss of AUS$160 market in NSW, had their “in house” senior adjust- million. ers assessing domestic damage in the afternoon. When one considers the normal assessment period The initial assessing activity was not undertaken for substantial earthquake damage of about 12 without difficulty, as large sections of the earth- months and adds a factor for the continuing run of quake-affected areas had been cordoned off by the new claims, it can be seen that the three events all Police to prevent further injury from falling ma- occurred within the earthquake assessment time sonry, awnings, and parapets. In fact, the central frame. In all, the loss-adjusting firms and the business district remained cordoned off for a period insurance companies serviced 144,000 claims, a not of eight days. Permission to enter damaged areas had inconsiderable feat given the complexity and special to be obtained from the Police and, apart from the circumstances of each event. authorities themselves, this was limited to loss adjusters and IES personnel. A number of factors caused stress and strained relationships in the loss-adjustment programme for Loss adjusting. In a disaster situation where Phase 4 Newcastle. Some companies chose to operate their of the IES has not been activated, it is normal claims settlement programme from their Sydney practice for loss adjusting firms to send in teams of office, either because they had no Newcastle branch adjusters, numbering about 15, on the basis of two or it was seen as a more efficient method. In some of weeks on and two weeks off until the job is com- these companies a number of claims managers and plete. In the case of the Newcastle earthquake, their staff abrogated their responsibilities to the loss organised relief of loss adjusters became practically adjusters. As they were some distance from the impossible. After the initial surge of claims, new action, they could not, or did not, want to grasp the claims kept coming in at the rate of up to 400 a week emerging problems. Lack of interest became appar- for over 12 months. A number of very experienced ent and played havoc with dispute resolution. loss adjusters were still hard at their task two and a Ongoing trauma had a lot to do with bloody-minded half years after the earthquake and their stress levels attitudes. Property owners fell out with builders, had long since gone through the roof. builders fell out with property owners and subcon- tractors; loss adjusters were criticised for being

236 Christopher Henri insensitive and uncaring. On-site dispute resolution 1990 through to the end of 1993. A number of the meetings involving all parties became the order of major home insurers placed advertisements in the day, and many overheated situations were regional newspapers calling the attention of their resolved by this method. policyholders to the necessity to lodge their claim without further delay. In October 1990, after an Insurance issues. There has been a good deal of industry meeting called to discuss a cut-off date, the scientific examination of the Newcastle earthquake, Insurance Council of Australia advertised in the commencing with a conference organised by the Newcastle Herald pointing out to domestic property Australian Institution of Engineers in Newcastle in owners they may be prejudicing their claims by late the middle of February 1990 and culminating in notification. In addition to the lingering tail in the October 1991 with a special conference on the lodgement of claims, a considerable number of lessons learned, which was organised jointly by the claims needed adjustments to their quoted costs Newcastle City Council and the Centre for Earth- because further damage was discovered during quake Research in Australia. repairs or even after the repairs had been completed.

There were many important implications for the There were many reasons why property owners were insurance industry, some of which were immediately slow in lodging their claims: apparent and others that became issues of concern in • believing they only had superficial damage, the months following the earthquake. Newcastle’s many domestic property owners decided to wait earthquake did not present, as some might suggest, a or were encouraged to hold back, letting more unique set of circumstances. Similar circumstances urgent major damage receive assessment and be could be replicated in many other cities and towns in quoted on for repair; Australia that might in future be subjected to earthquake. • many property owners believed they would have trouble getting builders and tradespeople to quote Earthquake risk in Australia. From the insurance for repairs and therefore decided to wait until the underwriting perspective of natural hazards, the risk initial rush had died down; and of earthquake had not been highly regarded. Insurers • Newcastle received record rainfall early in knew far more about tropical cyclones, severe February 1990 and rainfall continued well into storms, flooding and bushfires. Even in scientific the second half of the year. and academic circles, the study of earthquakes at best only received marginal government financial Until the storms of early February, most loss support. In consequence there was a low state of adjusters believed they had full control over the preparedness by the insurance industry for dealing earthquake damage claims and also in the question with the earthquake in Newcastle. That situation of quantum. However, the rainstorms changed that changed dramatically in the intervening years, and and virtually every claimant contacted their insurer the insurance industry was much better prepared or the loss adjuster to advise of additional damage technically to deal with the Ellalong (Cessnock) caused by water which was able to penetrate build- earthquake of August 1994, a much smaller event in ings through openings created by the earthquake. In terms of the number of claims and cost. many cases, property owners were not even aware that damage had been caused to their roofs. Notification of claims. There is no statutory time limit for lodging claims in Australia as there is in The contentious issue of earthquake damage versus New Zealand and elsewhere overseas. Consequently, reactive clay soil. In the period following the Australian insurers only have a defence against late earthquake, the Newcastle region experienced very notification where they can show successfully that heavy rain. This wet period continued into the third they have been prejudiced. quarter of 1990. It was then followed by an extended period of drought, which continues even to this time. Generally speaking, insurers had no previous The effect of these climatic conditions became experience of claims lodgement patterns for an noticeable towards the end of 1990 and very notice- earthquake event to draw on. As an example, one able through 1991. insurance company tracked the lodgement of claims on a monthly basis for three years and recorded a 14 The insurance industry became increasingly con- percent increase in claims lodged from the end of cerned at the continuing run of late reported claims

237 Wellington After the Quake and while there was genuine earthquake damage caution should be exercised in attributing all damage among some of these claims, by far the majority to reactive clay soil since this has no more credence were for damage not related to the effects of the than the rationale that all damage after the earth- 1989 earthquake. In their reports to insurers, loss quake was due to ongoing earthquake or induced adjusters and consulting engineers were advising ground movement. He insisted that each site should that in their opinion the damage was due to reactive be treated as an individual site unless specific data clay soils, slope instability or other non-earthquake was known on particular areas such that informed causes. comment could be made rather than sweeping statements that were often wrong. Homeowners who were seeing their buildings opening up could not believe that the damage had Pre-existing building defects. The essentially not been caused by the earthquake and many automatic nature of home insurance leads to the disputes between insurance companies and property necessary acceptance by insurance companies of the owners took place. Proof of damage and causation of inadequacies of buildings that may make them damage are very difficult areas for property owners susceptible to damage from an insured event. and insurers and these disputes became very costly affairs as each side resorted to engineer’s reports to Following an inspection of nearly 4000 residential prove their case. properties that involved sub-floor, roof cavity, externals and internals, one expert building consult- In order to try and help the people of Newcastle ant stated that approximately 70 percent of the understand what was happening to their land through structures inspected had defects sufficient to impair climatic extremes and the effect on their buildings, their ability to withstand a minor earthquake. Not the ICA and GIO Australia commissioned a struc- only was there erosion of wall ties, lack of collar tural and geotechnical engineering report, Factors ties, eroded brickwork or aged settlement pattern, influencing structural behaviour of residential but also there was a lack of support by piers and buildings in Newcastle. This report was widely general foundations. distributed. Several copies were lodged with the Newcastle Regional Library for general reference A high proportion of damaged buildings were purposes in the hope that it would help overcome the constructed of unreinforced brick masonry with little misunderstandings and communication problems resistance to lateral loading. Particularly vulnerable that bedevilled the insurance industry and the were gable ends, parapets, facades and chimneys. victims of the earthquake. Damage was caused to older two storey houses, and those with double leaf cavity construction suffered A lesson learned from this is that it could have been heavily from the lack of adequate ties, with the outer commissioned early in 1990 and released to all leaf collapsing as a result of the lack of restraint. concerned at the time. This would have greatly reduced the problems experienced by builders, In this respect, it is important to view damage to structural engineers and loss adjusters with the buildings in Newcastle and surrounding areas in the claims they were servicing. It is appropriate to correct perspective. A structural engineer observed mention that much of what was written in that report that the vast majority of buildings did not collapse, was known prior to the earthquake and was readily despite the fact that none had been designed against available for reference in publications issued by earthquake forces, and the high damage bill for Standards Australia and the CSIRO. Engineers and structural repairs was due, to a large extent, to the builders had always had those references available to poor quality of many buildings and houses caused them. However, the problem they and insurers had by poor initial construction and long-term structural to deal with was that so many of the buildings in deterioration. Newcastle were quite old and had been built at a time when building ordinance and regulations were Local councils and the building ordinance regula- not as stringent as they are today; in other words, at tions. Newcastle City Council advised that it would the time the buildings were constructed, they were require property owners and builders to submit a regarded as satisfactory. building application for any structural repair over AUS$1000. This presented a problem because One of the co-authors of the report, a geotechnical “structural” was not clearly defined and AUS$1000 engineer, noted in another paper, quite correctly, that was a relatively small sum. This issue was aggra-

238 Christopher Henri vated by the fact that Newcastle City Council did not A good example is that of a three-storey solid brick have enough building inspectors to maintain an building that had formerly been used as a factory but efficient and speedy process and, even with the help had been abandoned some years prior to the 1989 of seconded building inspectors from other cities, a earthquake in favour of a more modern and capa- backlog in building approvals developed. cious outer suburban location. This building sustained a moderate degree of damage. The owner and The term “betterment” became the centrepoint of his building consultants seized the opportunity to many arguments between property owners and their build into the repair specifications not only the insurers and building regulators. Ordinance 70 requirements for strengthening the building for requires buildings to be repaired to the latest stand- earthquake resistance but also for fire risk. Fortu- ards. It is generally understood that elements such as nately, in a conference that included Council electrical systems and plumbing may need to be building officers, it was revealed that although the replaced because they no longer meet current Council did require all the improvements specified, standards. However, in the case of the earthquake those not relevant to earthquake risk would not have damage, many domestic properties were found to been insisted upon until such time as the owner have either very shallow footings or no footings at wished to re-occupy the building or until Council, in all. For buildings with noticeable inherent structural working its way methodically through the code of weaknesses, earthquake repairs should only have building design, arrived at the particular building been carried out after the pre-existing problems had concerned. In consequence, the claim on the insurer been remedied by the owners. With regard to the was greatly modified but it was this type of activity servicing of an insurance claim, communication with which made life very difficult for the insurer. and education of the property owner as to the significance of any structural problems identified Fraud. Regrettably, a fraudulent element emerged. was essential prior to insurance repairs being carried This was particularly noticeable in quotes being out. However, this led to disputes as many property made by some sectors of the building trades. Insur- owners saw the earthquake as a tremendous opportu- ance companies had to resort to professional build- nity to repair all the old cracks and problems with ing consultants to check for fraud. Examination by their properties. In the second half of 1990, insurers one consultant revealed quotes of AUS$160,000 for noted an increasing number of non-earthquake a true damage factor of AUS$30,000, AUS$140,000 related claims being submitted. It was obvious that for a true damage factor of AUS$28,000 and property owners were hoping that their insurance AUS$86,000 for a true damage factor of AUS$2800. would cover repairs or rectification even though the cause may not have been earthquake. In many It subsequently became necessary for the Master instances, the builder was asked to include addi- Builders Association to remove a number of contrac- tional work in his quote for earthquake damage. tors from their membership. The Police Service established a special insurance fraud unit in Newcas- The poor construction, by modern standards, of tle that investigated all levels of fraud, from minor to many of Newcastle’s older commercial and indus- major, perpetrated by builders, tradespeople, prop- trial buildings and their inability to resist lateral erty owners and even to the extent of examining the forces has resulted in the reinforcement of building way claims were being administered by loss adjust- codes and, following the occurrence of sometimes ers and claims managers. Ultimately, a number of quite minor damage, building owners have had to builders were charged with fraud. conform with those new standards. Many did not have the financial resources to do so, and in some Conveyancing of earthquake-repaired property and instances authorities had to take a practical approach other real estate issues. The Australian Insurance and water down some of their requirements, but Contracts Act 1984 contains specific provision for usually only upon the owner giving an undertaking the sale of insured property. Section 50(1) allows for that improvements would be made over a reasonably a purchaser to become party to the vendor’s insur- short period. However, there was no leniency for ance during the process of the sale of the property. insurers. Given sufficient cover, building approvals The protection of the vendor’s insurance commences were not given unless repair plans incorporated all the day on which the risk is passed to the purchaser the improvements required. Some building owners and ends at the time when the sale or assignment is took advantage of this situation. completed, or when the purchaser enters into possession of the building, or when the purchaser

239 Wellington After the Quake effects his or her own insurance, or when the sale or house is also grossly under-insured but sustains only assignment is terminated, whichever first occurs. partial damage. The fifth house is fully insured and The problem of conveyancing would appear to be sustains partial damage. The end result of this peculiar to earthquake, as it is unlikely to occur in hypothetical streetscape is that one parcel of land any other type of claim, because only earthquakes now sports a brand new brick veneer home; another are likely to cause further damage at a later period. property through being fully insured has been The exception, of course, would be faulty workman- repaired and now looks like new with new paint, etc. ship. In most cases, the new claims made by the It is also possible that the underinsured constructive purchaser against the vendor’s policy were beyond total loss home has been replaced with a new brick the circumstances outlined in Section 50 of the veneer house through a combination of insurance Insurance Contracts Act and no benefit could accrue money and loans made available from the appeal to the purchaser. In any event, most purchasers had funds. The other two houses have been patch- effected their own building insurance. repaired and manifestly show their age and condition. To assist insurers, ICA obtained legal opinion from two eminent lawyers who held that if the agreement It is easy to see how some dissatisfaction arose in for sale or assignment was not made prior to the the respective real estate values of neighbouring earthquake then the purchaser could gain no benefit properties. pursuant to Section 50(1) of the Insurance Contracts Act. Their statement was qualified by other possi- Historic buildings. Many of the older buildings in bilities such as oral agreements and rights to occupy. Newcastle contributed significantly to the character Once it was agreed that the purchase was outside the of the city. Many of them were also close to the end scope of Section 50, the rights of any purchaser to an of their economic life. Where major damage had insurance claim depended on documentation of the been sustained, the best policy on economic grounds sale. If the agreement was not made before the was demolition and replacement with more modern earthquake, the insurer for the vendor was entitled to structures better fitted for modern living. In some simply deny the claim. If the purchaser effected cases, the cost of repair may well have exceeded the insurance after the event, the insurer would have no cost of replacement. This created considerable liability to meet the claim. tension in Newcastle between the owners and the heritage-minded members of the community. An interesting phenomenon that manifested in the real estate arena was the effect that earthquake Heated debate raged for a considerable period as repairs and reinstatement had on the real estate groups such as the Heritage Council fought for the values of properties that were fully insured, under preservation of certain buildings, or features of insured or not insured at all. Actually, some 1200 buildings, which some engineers and others felt homes were found to be uninsured, of which over 20 were unsafe. In the suburb of Hamilton, one building were declared to be constructive total losses. For had scaffolding around it for 12 months at a weekly social and community reasons, the authorities cost to the owner of AUS$1200 because heritage- decided to replace these homes with low-cost, brick- minded people were arguing over the proposed veneer, slab-on-the-ground homes financed by loans demolition. In the end, builders and their employees from the Newcastle Lord Mayor’s Earthquake refused to work on it because it was considered too Appeal Fund. Arrangements were made for the dangerous, and ultimately the building was demol- capital amount of the loan to be repaid at a future ished. date when the owner-occupier ceased to have a need for the home. Consider the hypothetical streetscape This type of tension was no doubt greatest where of five timber homes prior to the earthquake, all of buildings were only insured for indemnity, as such similar age and condition and all occupied by elderly insurance would not have paid for restoration, and people on pensions or fixed income, some of whom owners really had no choice but to demolish to make have family members living with them. The first way for new economic buildings. house is not insured and is declared a constructive In the main, insurers do not have a negative attitude total loss. The second house is not insured but only to heritage buildings; they do not universally or sustains partial earthquake damage and can be automatically apply premium loadings simply repaired. The third house is grossly under-insured because a building is listed. The underwriting and is declared a constructive total loss. The fourth

240 Christopher Henri approach is determined by their experience of some Given the resources available through insurance, the of the more obvious and recurring features that are question was posed as to how owners should go usually manifest in listed properties: about restoring badly damaged buildings of high, noncommercial value. For example, should new •there are often problems of replacement or finials, gargoyles and the like be manufactured out reinstatement where materials and finishes are of modern materials so that they look just like the expensive to reproduce; ones destroyed but are in fact not the same ones? If •there are often hazards associated with fire safety these features were reproduced, would they not just (electrical wiring, etc.), security and mainte- be building a “theme park” that could never have the nance; same historical significance as the old? •property owners are frequently under-insured; Again, should insurers prop up the old portions by and boring holes through them, inserting stainless steel •pressure to reinstate a property to a particular rods and the owners and community then pretend condition often comes from the owner or the that they are the same as formerly? Would Stone- community quite regardless of any requirement henge or the Coliseum of Rome or other less well associated with heritage listing. known but equally historic structures ever be regarded again with the same awe if they were fixed Against this background, it is difficult to avoid the in this way? conclusion that most considerations that the owners of heritage buildings might encounter when arrang- Perhaps Coventry got it right after its famous ing insurance protection flow from the nature of Cathedral was bombed, burnt and reduced to a ruin their own particular property or location. Heritage in the second world war. Coventry resolved to build listing does not raise automatic barriers or impedi- a new modern Cathedral right beside the ruin and ments to obtaining competitively-priced insurance separate the old from the new with a glass wall. In cover. But it does alert insurers to the need for that way the worshippers of Coventry had a practical careful assessment to ensure that an adequate and and magnificent church in which to follow their faith appropriate contract is arranged and that the basis of and preserve what remained of the old. any possible future loss settlement is clearly established and understood by both parties. The modern insurance policy issued to cover commercial premises and major noncommercial Architecturally significant buildings. Buildings of buildings such as churches, contains three main monumental proportions, such as many of the older elements. Firstly, it promises to indemnify the churches in Newcastle, presented particular prob- insured against loss. Secondly, it promises that lems. One very large church was described by one indemnity on a new-for-old basis. Thirdly, it prom- engineer as being no more than a multi-storey ises to meet the extra costs incurred because of garden wall! The roof was far above the floor with regulations issued by the appropriate authorities. It is none of the cross-bracing provided by intermediate in this area of “extra costs” that the real problem floors in commercial buildings; the building was arises for the insurer. The insurer can readily long and narrow; there were no major trusses and the determine the financial liability inherent in indemni- copper-clad, barrel-vault, lightly-built roof was the fying the insured on a new-for-old basis. But it is only means of holding the side walls together; the more difficult to determine what extra costs are wonder was that it did not all fall in a heap. There likely to be demanded. In an attempt to place some are many church buildings like that in Newcastle, limit on such items, the underwriter inserts the their imposing appearances belying their fragility in stipulation that the extra costs are limited to the earthquake terms. restoration of the actual damage caused by the peril insured against unless the damage exceeds 50 The issue was how to deal with such buildings, percent of the full value of the building. especially when they had significant sentimental or heritage value and when feelings ran high if there However, recent legal opinion seems to be that if the was any suggestion of their not being restored in a building owner is prevented from restoring the manner identical to that which existed prior to the damage, however minor, unless he brings the entire damage. structure up to current standards, then he cannot be indemnified unless all the work is put in hand, and

241 Wellington After the Quake that at the expense of the insurer. Never mind the 50 recover their loss from their business interruption percent proviso specifically brought into the clause insurance. wording! The difference can be millions of dollars. However, in those cases where there had been Asbestos problems. There were many warehouses, damage to the insured’s property and a business commercial buildings and private homes in Newcas- interruption claim was successful under the policy tle roofed with asbestos. There was also asbestos there was an element of cover which did benefit used in the form of lagging around pipes and for many businesses. This was known as the “adjust- insulation concealed in ceilings. The effect of the ments clause”, which allows adjustment of a claim earthquake on this material had a dramatic impact on to take account of circumstances that would have the cost of repairs to buildings. In fact, most build- affected the client’s business had it not been for the ings in Newcastle with asbestos roofs were the damage. In one example, there was a large hardware subject of earthquake damage claims; in many cases, chain whose property was closed down for many the earthquake caused movement in the fixing months after the earthquake and who could not screws and sheet joints that allowed the entry of participate in the resulting increase in trade as a water. consequence of the earthquake. They were, in fact, fully compensated. In quite a number of cases, asbestos was incorrectly handled and there were examples of contractors The Cessnock earthquake, 6 August 1994. The city removing asbestos without notifying the authorities. of Cessnock is situated about 45 km due west of One contractor was charged by the authorities for Newcastle. The epicentre of the August 1994 dumping asbestos material in nearby bushland. It earthquake was near the small village of Ellalong, 10 was often the case that quotations for removal of km south of Cessnock. The earthquake measured 5.3 debris had to be substantially escalated to comply on the Richter scale, slightly less than that of the with the statutory requirements for removing this Newcastle earthquake. While it is still too early to dangerous material. One quotation for AUS$5200 provide final data on insurance claims, the aggregate for debris removal increased to AUS$72,000 when loss is expected to be about 10,000 house claims and the contractors calculated the cost of compliance. 400 commercial claims for an estimated payout of AUS$34 million. For the most part, houses sustained Commercial insurance claims for business interrup- only minor damage. tion. This proved to be a very difficult and costly aspect of the earthquake for the business community This earthquake was not declared a disaster by of Newcastle. Small business was found to be almost government or the ICA, and the processes of loss totally without insurance protection for business adjusting and claims settlement were left entirely to interruption and small- to medium-sized businesses individual insurers. This time, however, loss adjust- that did have insurance cover generally found the ers were much better prepared to point out to cover to be inadequate or ineffective. property owners the non-earthquake pre-existing building defects and maintenance problems. There are normally three factors for a business interruption claim. Firstly, there has to be an insured A number of property owners in the Newcastle area peril, such as an earthquake. Secondly, the actual who had received cash settlements for their Newcas- property of the insured at the premises of the insured tle earthquake claims and who had not carried out has to be damaged by the insured peril, and thirdly, the repairs came forward with new claims for the there has to be an interruption to the business same damage, alleging the Cessnock earthquake as resulting from that damage. It is normal practice to the cause. In some cases, these people tried to claim nominate an indemnity period and this is usually through the same insurer and in other cases they had stated as 12 months. changed to another insurer in the intervening years. It was quite foolish for these people to attempt to The problem for those businesses that had interrup- pursue their false claims because the insurance tion cover was that many of them did not suffer industry holds a Newcastle earthquake reference actual damage and, although they experienced either database of some 48,000 entries. The media took up the total elimination of their trade or a very signifi- the issue and the practice soon faded away. cant downtown for many months and in some cases several years, those businesses were not able to

242 Christopher Henri

Conclusion Insurance over home and contents is essential and property owners must be made aware that disasters The spate of natural disasters in Australia over the do happen and sooner or later a disaster will befall past five years has brought into focus a number of their community. If adequate insurance is in place, a important considerations for the insurance industry large element of disaster trauma can be eliminated. and the community in general.

Natural disasters deliver up tens of thousands of Acknowledgements domestic claims and hundreds of commercial claims, The author gratefully acknowledges the contributory which provide a significant database for analysis. assistance received from Les Lester, Consultant, When combined with data available from disaster Insurance Council of Australia and Colin Wright, welfare agencies and community relief agencies, a Chartered Loss Adjuster. very exact picture of the degree of non-insurance and under insurance emerges. Bibliography The degree of non-insurance has surprised not only Brunsdon, D R. 1991. “The aftermath of the New- the insurance industry, but governments and welfare castle earthquake”. Newcastle Earthquake: An agencies. The January 1994 bushfires in NSW Appraisal. Professional Education Workshop 24/25 revealed that 22 percent of the homes totally de- October 1991. stroyed by fire were not insured. An even more alarming statistic was the discovery that 52 percent Burgess, G. 1992. “Adjustment of [Newcastle of the contents of homes totally destroyed in the earthquake] claims”. Paper delivered at the Austral- bushfires were not insured. People choosing not to ian Insurance Law Seminar, Adelaide, May 1992. insure their prime asset ranged across the socio- economic spectrum. Clayer, J R and others. 1985. The Health and Social Impact of the Ash Wednesday Bushfires. Adelaide: Under-insurance is a disaster that can be avoided; it South Australian Health Commission. is only a matter of effecting adequate insurance. The percentage by which homes were generally under- Douglas, D J and other. 1991. “Movement of the insured in these bushfires was 30 percent, that is the ground — don’t blame it all on the earthquake”. sum insured to the real cost of reinstatement. Newcastle Earthquake: An Appraisal. Professional However, in some socio-economic groups this Education Workshop 24/25 October 1991. percentage rose to as high as 50 percent. In many cases, the sum insured did nothing more than meet Henskens, A. 1991. “Comments on some legal the liability of the homeowner to the mortgage; in aspects arising from the 1989 earthquake”. Newcas- consequence, the homeowner’s own equity in the tle Earthquake: An Appraisal. Professional Educa- property was unprotected. tion Workshop 24/25 October 1991.

Insurance of contents of homes generally falls short Melchers, R E. 1991. “Realism and myth in inter- of the real cost of replacement by an average of 30 preting the Newcastle earthquake”. Newcastle percent and rises to 60 percent. Earthquake: An Appraisal. Professional Education Workshop 24/25 October 1991. When disaster victims are interviewed by welfare agencies, the opportunity is taken to find out why Morgan, A. 1991. “The iceberg factor”. Newcastle they are either not insured at all or are grossly under- Earthquake: An Appraisal. Professional Education insured. There is a section of the community that Workshop 24/25 October 1991. just does not believe in insurance and chooses to carry the risk themselves, believing that a disaster NRMA Insurance Ltd. 1991. Newcastle Earthquake: can never happen to them. However, it is this section The Unexpected Event. that becomes the major beneficiary of appeal funds, which means that instead of transferring their risk to Simpson, G. 1990. Paper delivered to the Fourth an insurance company they have merely transferred Earthquake Engineering Conference, University of their risk to the generosity of their fellow citizens. Queensland, November 1990.

243 Wellington After the Quake

Walker, G. 1991. “Lessons from the 1989 Newcas- tle earthquake”. Newcastle Earthquake: An Ap- praisal. Professional Education Workshop 24/25 October 1991.

244 David A Middleton

The Earthquake Commission’s preparations for disaster

David A Middleton

General Manager, Earthquake Commission, Wellington

The Earthquake Commission (EQC), now restructured as a separate corporate entity, has a tremendous challenge: how to handle the 70,000 or more claims from the Wellington scenario earthquake with a dozen staff, all of whom have been personally affected by the disaster.

Planning is the only solution. EQC’s current plan covers six areas: • staffing, including temporary staff; • operations — configuring the office to cope with the influx of claims; • claims-assessing resources; •activation of the insurance industry’s emergency plan (the IEP); •activation of the alternative site at Manukau, near Auckland; and •accounting and financial aspects.

However, EQC wants to ensure its catastrophe response planning is as comprehensive as possible. Having sought out and learned from the best practitioners in the world, EQC has commenced a revision of its own plan. This will document the coordinated involvement of all the outside specialists identified as having a part to play. Full benefits of the latest technology will have to be gained in order to maintain communications links, register triage claims, process claims and monitor progress. Regular training, testing and review will not only promote readiness, but will also encourage all participants to take a proprietary interest in the plan.

Introduction claims on the Fund, amounting to $3 to $3.5 billion when a prudent insurer’s margin is added (Dowrick The Earthquake Commission (EQC) is a Crown et al., 1991, 1992). Entity (government agency) set up under the Earth- quake Commission Act (1993) to administer an Nevertheless, a Government guarantee is written insurance scheme that protects participants’ property into the Act. Very advanced corporate modelling against damage or destruction resulting from certain (Ansley 1994, Ansley and Kreps 1994) carried out types of natural disaster, the most significant being on behalf of the Commission has established that the earthquakes. Membership of the scheme follows probability of calling on this guarantee in the automatically from the purchase of fire insurance medium term (i.e. EQC’s “Probability of Ruin”) is from an insurance company. That company collects very high, so long as current arrangements of EQC’s the premium on EQC’s behalf and passes it in bulk payments to the government are in force. to the Commission monthly. Recently, the scheme was changed to include only Due to the splendid foresight of the previous genera- domestic property (houses and their contents), and a tion in setting up such a scheme immediately four year phase-out from nonresidential property is following the second world war, and to nature’s currently under way. The new residential scheme sending a “quiet period” for earthquakes since then, has been called “EQCover”. EQC’s capital and reserves have been built up to NZ$2.4 billion. This is still not enough, but currently The main objective of EQC is: with the commercial reinsurance arrangements EQC has been able to make, the Commission should be to pay all lawful claims on the Commission able to fund its maximum foreseeable loss. This, promptly and fairly and still remain solvent caused by movement along the Wellington fault line without calling on the Crown guarantee under the city, would result from more than 100,000 (EQC Statement of Intent 1994-1996)

245 Wellington After the Quake

Funding is critical to the recovery process. Mader EQC has investigated insurance companies’ catas- (1994) states, “Financial resources are the fuels that trophe response plans that have had to be imple- drive the rebuilding engines after an earthquake”. mented. Commissioners and staff visited companies The experience of areas of Los Angeles after the in the UK that had experienced the devastating Northridge earthquake illustrates the point in a storms of a few years ago and in Australia to learn negative way: without funding, what little happens, about the Newcastle earthquake and subsequent happens slowly. bushfires and hailstorms. EQC representatives went to Los Angeles to see US companies still engaged in With its dozen salaried staff, EQC handles about the aftermath of the Northridge earthquake. Other 3000 claims per year as a matter of routine. These offices, like the American Red Cross, Los Angeles involve the employment of external assessors, City Department of Building and Safety, California engineers, valuers and other specialists. The greatest State Government Office of Emergency Services single-event workload came from the 1987 Edge- and the Office of the Insurance Commissioner of cumbe earthquake, which resulted in 6000 claims. California were also called upon. All were very EQC estimates that the number of claims arising generous with their time and their information, from its worst scenario could exceed 100,000. With holding nothing back. State Farm Insurance even the uncertainties of the past few years now settled invited EQC representatives to spend three days with and EQC’s future as a purely domestic insurer their Disaster Response Team in Bloomington, established, EQC must develop and maintain its own Illinois, an experience that proved seminal in the catastrophe response plan. In the past, the State revision of EQC’s own catastrophe response plan, Insurance Office stood behind the Earthquake and which is now under way. War Damage Commission’s obligations with all its resources of a national branch structure, claims The scenario set for the conference states that over personnel and expertise. This facility disappeared 43,000 houses in the Wellington area have damage. upon the decision to sell State to the private sector This is about one-third of the number of houses in and subsequent restructuring of EQC into a separate the area. On top of these (say) 45,000 claims there corporate entity. The link is now broken — EQC is are those from the wider area affected — north into on its own. the Manawatu and Wairarapa, south to Marlborough and Nelson and even as far as Westland and North The Commission has developed its own disaster plan Canterbury (according to the scenario). There is a since that time. It is divided into six sections: total of 235,000 homes in these regions, housing • staffing, including temporary staff; about 20 percent of the entire population of New Zealand. EQC could expect a further 25,000 claims • operations; from outside the Wellington region. Obviously these •claims-assessing resources; will be smaller claims, many involving only contents. EQC must pay all claims over $200, a minus- • activation of the insurance industry’s emergency cule excess by world standards. plan (the IEP); • activation of the alternative site at Manukau, near The total number of claims arising from this earth- Auckland; and quake is, therefore, likely to be at least 70,000. EQC’s planning is based on a similar earthquake • accounting and financial aspects. being the maximum credible event of about 100,000 claims. EQC’s response will depend greatly on the IEP (NZ Insurance Council, 1993), which will take over other sections of EQC’s own plan (e.g. the allocation of The civil emergency assessors) if the IEP is activated. This is a decision An earthquake of this magnitude and resulting in largely left to the local emergency committee. While such casualties will, of course, lead to the declara- the IEP would provide an adequate response to tion of a state of Civil Defence Emergency under the moderate disasters, its viability is less certain when Civil Defence Act (1983), which would give definite faced with the extent and dislocation of this major priority to personal safety and welfare — not areas earthquake. This is not to say that EQC’s current of professional concern to EQC — during the plan would necessarily fare any better. response phase. EQC must also expect restrictions on access to its own office in the area of reclaimed

246 David A Middleton land in downtown Wellington, west of the harbour. outlying districts, using, to the fullest extent possi- This is within the MMIX isoseismal. ble, methods that do not involve a visit by an insurance claims assessor. No doubt, access to many claims sites will also be denied for some time. While this may not cause any Human needs difficulty initially, EQC should be ready to commence the inspections necessary within two weeks The human resources required by EQC to accom- of the earthquake and claims in “off limits” areas plish its work will exhaust local supply. Along with will then become a concern. In the meantime, the tradesmen and professional people brought in by settlement of lesser claims — those out in the other organisations, EQC and the insurance compa- MMVI areas and below — will be progressing. nies will have to “import” assessors, engineers and other claims-handling personnel. Whether they come It is prudent for us at EQC to try to ensure by prior from other parts of New Zealand or from abroad, arrangement that our staff can get to our office, if these people will be worked for long hours while safe, and that that office has a priority for the they are on site and will have a finite tour of duty. restoration of necessary services. Equally important Obtaining assessing resources from off-shore, is a plan for alternative siting of the office, either through the international firms in New Zealand and within Wellington or away from the city. EQC has independently of them, is a part of EQC’s current an alternative site near Auckland, which is described plan. later. The people EQC sends out to the public will be Civil Defence is in the hands of local authorities and dealing with claimants who have just suffered great each Civil Defence Controller may accord priority personal loss or tragedy. They may still be in shock treatment for EQC at their discretion. Obviously a or ignorance about the fate of loved ones or their critical contact for EQC is the Wellington City own future. An insurance claims executive with Council Emergency Management Office, but a experience of the Newcastle earthquake of 1989 comprehensive approach to all 78 controllers is recently told the author that the most difficult aspect necessary to obtain coverage of all possible claims of all was the interface between traumatised claim- sites in New Zealand. ants and overstressed insurance personnel.

A rapid inspection and tagging system has been The first need is for adequate pre-disaster training, prepared by the Ministry of Civil Defence and preparation and briefing. This, of course, presup- disseminated to all local authorities. Again, different poses that individuals have been identified well in local practices will complicate planning, but a link advance. Welfare, medical and counselling resources with this system could be of benefit to EQC in that it should be part of the on-site catastrophe response provides an initial indication of the extent of the team but, more than that, peer contact, partnering, damage. Coordination and multiple use of surveys is socialising and opportunities to interact with each important. There are reports (for example, Robinson, other must be part of the response plan. 1988) following both local and overseas events, of victims losing patience with the seemingly constant EQC staff availability stream of inspectors traipsing through their properties on behalf of one authority or another. Further- In the conference scenario, the earthquake has struck more, for reasons of efficiency, EQC could avail at the homes of every staff member of the Commis- itself of reports obtained for other purposes (e.g. sion, including potential temporary staff to be taken chimney safety, integrity of foundations, etc.) to on in Wellington because of the emergency. These assist the claims process. people will at least be under some personal stress and have priorities ahead of trying to report for With thoughtful planning and the cooperation of the work. Matters like missing pets, nervous children, authorities, EQC will seek to utilise the period of the chaotic homes or disrupted transport will militate Civil Defence emergency constructively instead of against their coming in. These priorities may not be resigning itself to a situation of restriction and what we would prefer, but they must temper EQC’s disruption. It could marshall, brief and equip its dependence upon Wellington-based staff to turn out response team for its duties within the most severely on its behalf. affected areas while settling smaller claims from

247 Wellington After the Quake

This means our planning must not be dependent mortgagees if they then use the cash to liquidate upon the availability of individuals. Dual staffing of their debt on a badly damaged house, leaving the critical positions will assist, but of more use is the occupiers debt free but homeless. EQC will have meticulous detailing in writing of all necessary to consider methods of settling claims that, while duties and functions. EQC has a Disaster Action avoiding the insurer’s nightmare of becoming the Plan of which every Commissioner and senior staff guarantor of every tradesman’s work, ensure that member has several copies for home, briefcase and claims proceeds are used for the purpose in- office. It is intended to be clear and very detailed, tended. A system of payment on completion of containing pro forma forms and statements, names repairs to the satisfaction of the claimant is not and contact numbers, location of equipment and difficult to set up or administer. supplies, and procedures for setting things in motion. • According to a Government discussion paper (Hon Doug Kidd, 1991), the Government will Staff who may be willing to continue working from wish to see essential community facilities re- Wellington may be reluctant to go up to Auckland to established first, followed by domestic housing the alternative site. It could be several days at least and then commerce. Market forces alone will not before any regular EQC staff manage to report to the ensure this order of priorities. EQC, as virtually Auckland office. The alternative site may well be the sole funder of housing reinstatement, could operated by alternative staff, brought together be seen as an agency through which Government through the efforts of a non-Wellington domiciled policy could be implemented by direction of Commissioner, utilising their Disaster Action Plan. scarce building resources, both human and material. This is an area that several papers at The government factor this conference touch upon, with an indication As the government can shift its attention away from that follow up work is necessary. matters of initial response, EQC must be prepared to • EQCover follows automatically from the pur- be regarded as a prime implementer of any policy chase of a homeowner’s policy from a regular devised to deal with recovery. Prior consultation will insurance company. The corollary is that, if there clarify for each side the requirements and expecta- is no homeowner’s policy (or any policy of fire tions of the other. insurance), there is no cover from the Commis- sion. EQC’s scheme does not relieve New Matters to be talked through include: Zealand authorities from the problem of unin- • The manner in which government would expect sured homeowners. For this particular “earth- EQC to settle claims. The simplest method of quake”, we can predict that 1500 damaged quantifying the amount of loss or damage and houses and 8000 owners of damaged personal then paying out by cheque may well be unhelpful possessions will not be insured. These will form if banking facilities are disrupted or rebuilding a sizeable pressure group that will no doubt catch resources are unavailable. Due priority will need public attention. to be given to the recovery of the community. Desertification of earthquake-hit areas through Disruption of lifelines and infrastructure lack of funding for domestic renewal has been shown to be a problem in other countries, e.g. The Centre for Advanced Engineering’s study of USA (Colvin and Gordon, 1994). In New Wellington’s lifelines in earthquakes (Centre for Zealand, although the funding for domestic Advanced Engineering 1991) contained some renewal will come predominantly from EQC, a preliminary assessments of the time it would take government agency, EQC claims payouts may be before a general service could be expected to be spent in other ways than on repairs and re- restored. The scenario reflects these assessments: instatements. There is still, for example, the • up to two weeks for water; possibility of widespread expenditure of claims • 12 weeks minimum for sewerage; proceeds on means to enable victims of the disaster to leave behind their shattered dwellings •two weeks for electricity supply; and restart life elsewhere. Also thwarting the •three to six weeks for telecommunications purpose of domestic recovery and renewal is the services, although a restricted cell phone service practice of paying the proceeds of claims to should be available within a day or two;

248 David A Middleton

•several weeks for reasonable road access and especially to deal with small claims, possibly even months for rail; settling them there and then, over the telephone. In this scenario, calls from Palmerston North, the top of • six weeks for the airport. the South Island and any from further afield could be In most cases, a basic manageable service for directed to the special small claims call centre. priority use could be in operation within days or EQC must be prepared to operate without access to even hours. EQC could make a good case for being its primary computer systems. Normal business registered as a priority user. Although there is no prudence is followed by making tape backups and doubt that an earthquake of the magnitude postulated storing them off-site. EQC has an alternative site for this conference will dictate a removal of EQC’s from which to operate, in the Manukau City centre, headquarters to the Auckland alternative site, EQC close to Auckland airport. An agreement with a will need to return to its Wellington headquarters as supplier has been concluded by which these alterna- quickly as a resumption of services can allow. tive offices will be equipped and set up within 72 However, a substantial presence in the disaster area hours of notice being given by an EQC Commis- will have to be maintained for the access of the sioner or senior staff member. There are sufficient public and for control and coordination of the claims space and support facilities to enable EQC to double inspection operation, which will involve several its current staff numbers with temporary telephonists hundred personnel. This is a major part of the and data input personnel. This site is tested annually Insurance Emergency Plan in which EQC is a and its adequacy reviewed. Following the 1994 test partner. This plan deals with the setting up of and review, arrangements at the site and for its use temporary information/claims centres by pooling the were substantially upgraded. resources of all insurance companies. The IEP provides for all claims handling to be effected Disruption of the insurance industry through an on-site coordinating adjuster (OSCA) As already stated, EQC currently relies on the IEP of and his team. The OSCA’s role is pivotal to the cooperation among insurance companies and a purpose and operation of both the IEP and the pooling of resources to enable an adequate industry- centres set up under its provisions. These centres wide response to a disaster. The disaster prepared- will have to be outside the areas of severest disrup- ness of individual companies within the industry is, tion, but close enough to promote maximum opera- therefore, of interest to the Commission. It is a tional efficiency. subject on which we have sought little information to date. Communications and operations Because EQC extends coverage only to those who After the Northridge earthquake, an insurance have a valid policy of insurance with a commercial company in California said it received 15,000 claims insurance company, it must at some stage (at present (about half its eventual total) in the first five days. it is the initial stage) obtain confirmation from the Primary requirements for handling this level of company that a policy is in force. Currently, this is activity are adequate communications systems and achieved by an exchange of correspondence, an claims handling operations. EQC’s normal resources unwieldy enough procedure when a 3000-claim will have to be multiplied several-fold to be able to event occurs. Clearly, arrangements will have to be cope. Traditional insurance company claims pro- made for the electronic interrogation of the data- cessing methods will have to be re-examined by bases of at least the market leaders if this one lateral thinkers during a process re-engineering necessary step is not to reduce EQC’s handling of exercise. Technological solutions, such as expert the 70,000 claims to a snail’s pace. EQC is currently systems, document imaging, estimating software and seeking assurances from external auditors that geographical information systems, must be investi- company records will still be available in spite of a gated. The attributes of the country’s telecommuni- disaster. cations system must also be utilised to the full; for example, an 0800 number’s ability to recognise the area code of a caller could be used to direct calls Shortage of resources from areas where minor damage has occurred (say The papers in the physical reconstruction section of MMVI and below — the outlying perimeter of the this conference address issues surrounding the affected area) to separate call centres equipped

249 Wellington After the Quake provision of sufficient building resources to allow acceptance of them. EQC has developed introduc- reconstruction to be completed. EQC must also tory material for assessors arriving from overseas to consider how to cope with the shortage of claims- work during a disaster. handling resources — assessors, engineers, tradespeople and insurance staff. Financial markets

The change in cover given by the new residential The short-term reaction of currency markets to the scheme alters the relationship between EQC and disaster is uncertain. Perhaps the stronger likelihood insurance companies. Whereas previously each party is that the kiwi dollar will fall with a preponderance was involved in a replacement basis claim from the of players anxious to sell out of it. This will, of start, now insurance companies will be activated course, create import inflation to exacerbate the only when a claim exceeds the limits to which shock inflation following from the post-earthquake EQCover insures — $100,000 for a dwelling plus shortages of consumables. $20,000 for its contents. These are very high excesses from the insurance company point of view This is the background against which EQC will be and they will be concerned with only a small seeking to liquidate its assets to provide the funding minority of domestic claims. (They will be called for claims settlements. At present, about 40 percent upon for motor vehicle claims and other items of those assets are denominated in five foreign covered by them but excluded under EQCover.) It currencies and a partial natural hedge will be in seems to follow that insurance companies with operation. As the kiwi falls, EQC’s foreign assets predominantly domestic portfolios will be net will rise in value, while EQC’s claims payment resource providers under the IEP, with EQC being a currency remains kiwi dollars. However, import major user. I should add a note here that, until the inflation will cause claims costs to rise, subject to end of 1996, when EQC relinquishes its last nonresi- the caps on EQCover of $100,000 per home and dential risk, it remains the first loss insurer up to a $20,000 per contents policy. limit of this class of property also, but this scheme is on an indemnity basis. Apart from working capital, the rest of the Natural Disaster Fund is invested at government direction in The telemarketing industry already has most of the its own bonds. The government would have to resources needed for setting up and operating claims borrow to replace the EQC money now required to calling centres. Training and software — normal pay for the disaster. The orderly liquidation of requirements for a telemarketing company’s client investments is a matter that would involve Treasury, — are the only additional elements to add to the the Reserve Bank and EQC. For EQC’s part, its premises, communications systems and staff already reinsurance programme cuts in before the Fund is employed in that industry. EQC is investigating the exhausted, so it can be used to buffer investment possibility of telemarketing specialists having a role liquidation. in the catastrophe response. Reinsurance There are about 350 insurance assessors in New Zealand who could handle earthquake damage EQC buys one of the world’s biggest catastrophe claims. With each assessor capable of handling reinsurance programmes, by which the international about 100 open claims at once, and being in demand market would commence reimbursing EQC for the from insurance companies as well as EQC, there is cost of claims after they exceed NZ$1 billion, to the obviously going to be a shortage. The two ap- tune of a further $1 billion. The total claims cost to proaches to deal with this shortage (not mutually EQC, to which reinsurers will be contributing, will exclusive) are to use assessors sparingly and to be $2.5 billion to $3.0 billion. contract with overseas suppliers. Some of the Our brokers will need accurate reports of EQC’s technology mentioned under “Communications and claims payments to effect the timely collection of operations” and use of other specialisations like proceeds from our reinsurers. Other insurance quantity surveyors, property managers, engineers companies will also be making demands on their and architects (supervised by a senior assessor) will reinsurers. The currency in which these claims will achieve the former. As for obtaining overseas staff, be paid is New Zealand dollars. Reinsurers’ demand the difficulty is not in the numbers but in the for the several billion New Zealand dollars required training, orientation, logistical support and local

250 David A Middleton to meet their obligations is one factor arguing Conclusions against a spectacular fall in the value of the kiwi — EQC has scanned the world in search of the best there will still be significant demand for the cur- practices for handling a large and sudden influx of rency. claims after an insured disaster, when the providers of the cover are themselves affected by the disaster. Media Although we have found several companies that do The news media are a legitimate part of any disaster it well, we have to recognise our own unique situation: our challenge is to enable them to be situation: Our organisation of 12 permanent staff informative, accurate and constructive. must be turned into one of perhaps 1000 in a very short time. Our claims system handles about 3000 It is as vital to prepare and plan for media activity as claims per year — it must suddenly be made to it is for any other part of the catastrophe response. handle over 100,000. It is not enough just to import Much can be done beforehand in the forms of the people and the equipment within days of the ensuring systems can produce the timely statistics event. We have to have an organisational structure that interest the press, pre-production of announce- waiting to be activated to manage the new staff, the ments to the public for television, radio and newspa- new sites, the new equipment and all the other pers, and finding the contacts with whom to open up necessary features. channels of communication with each organ of the media. Unlike other disaster sites we have been told about, we would not be an island of destruction in a sea of EQC has deposited with radio stations and newspa- resources (Newcastle 1989, Loma Prieta 1989, pers a copy of its “What to do if you have a claim” Northridge 1994) — Wellington would be an island statement in the hope that it will be used after a of destruction in a sea, full stop. The transport links disaster. Perhaps the hope could be turned into between Wellington and the rest of New Zealand something more formal and certain. and the world are the most vulnerable feature of the city. We can also prepare generally for the stories that are bound to break — the uninsured houseowner who EQC’s current plan is to link into the insurance has lost everything, unusable community structures industry’s IEP, obtain additional claims-assessing that could not afford insurance, aspersions that EQC resources from overseas and operate its office, has insufficient money to meet claims, the price and expanded by temporary telephone and inputting availability of rebuilding resources, delays in staff, from an alternative site near Auckland, if repairs, etc. necessary. Meetings with organisations that have experienced disasters like the worst that EQC could The international press will take an interest in a face have convinced EQC that more comprehensive disaster of the magnitude of the scenario and any preparations are needed for the “mega-catastrophe”. releases for this media will need more general background for overseas readers with little idea of EQC will meet its responsibilities for the rebuilding the New Zealand situation. of Wellington by planning meticulously for the event, leaving nothing to chance. Such planning will become an integral part of EQC’s routine operations, The scientific community as constant review will be needed to maintain Whenever an earthquake of interest to New Zealand currency with available technology, increasing occurs, the National Society of Earthquake Engi- knowledge of seismic disasters and the circum- neering sends a reconnaissance team. This is usually stances of all the partner organisations we have made welcome and all possible access and courtesies involved. This plan is the first step in a four-part are extended by the hosts. EQC has itself benefited process of responding to a catastrophe, the whole of from the tremendous goodwill of American friends which involves planning, initialising the plan, in sharing their experiences and information after sustaining the catastrophe response organisation earthquakes they have had. It would be only civil of during the emergency, and finally — very impor- us to receive overseas visitors in the aftermath of our tantly — shutting down the operation in an orderly own disaster with the same hospitality and openness. manner. The hosting of international delegations should be part of our catastrophe response plan.

251 Wellington After the Quake

Acknowledgements Earthquake. Report from a Symposium Sponsored by the Geotechnical Board and the Board on Natural I would like to acknowledge gratefully the assistance Disasters of the National Research Council, p 232, of the following people in the preparation of this National Academy Press, Washington DC. paper: Mr Ian McLean, Mr Leicester Steven, Mr Doug Bent, Mr Lance Dixon and Mr Matt Bird. Robinson, G W. 1988. Observations of Post- Earthquake Period. Unpublished report on the References Edgecumbe (New Zealand) earthquake of 1987. Ansley, Professor C. 1994. EQC Solvency and Long Term Financial Outlook. Report prepared by Frank Russell Company Pty Ltd for the Earthquake Commission.

Ansley, C and R Kreps. 1994. “The Probability of Ruin”. Notes on a seminar held in Wellington by the Earthquake Commission.

Centre for Advanced Engineering. 1991. Lifelines in Earthquakes — Wellington Case Study. Project Report. Table B11.3 p.154. Christchurch: Centre for Advanced Engineering.

Colvin, R L and L Gordon. 1994. “LA plans cash infusion to revive quake ghost towns”. Los Angeles Times, 3 May 1994.

Dowrick, D J, W J Cousins, X Q Zhao and D A Rhoades. 1991. Study of Potential Losses to the EQC from Damage to Housing in Large Earth- quakes in Central New Zealand. Report prepared by the DSIR for the Earthquake and War Damage Commission.

Dowrick, D J, W J Cousins, X Q Zhao and D A Rhoades. 1992. Potential Earthquake Loss Estimates for the EQC Derived Using Different Attenuation Models for Mercalli Intensity. Report prepared by the DSIR for the Earthquake and War Damage Commission.

Earthquake Commission. 1994. Statement of Intent 1994-1996.

Kidd, Hon Doug. 1991. The Government Role and Responsibilities in Disaster Insurance. Government Discussion Paper. Office of the Associate Minister of Finance, New Zealand Government.

New Zealand Insurance Council. 1993. Insurance Emergency Plan. Issued by the Insurance Emer- gency National Committee.

Mader, G G. 1994. Recovery, Mitigation and Planning, Practical Lessons from the Loma Prieta

252 Werner Schaad

Insurance and Financial Markets 2

253 Wellington After the Quake

254 Werner Schaad

Reinsurance — Its contribution to risk assessment and disaster management

Werner Schaad

Swiss Reinsurance Company, Zurich

The way that reinsurers would handle the aftermath of a Wellington earthquake, and what they could do to help deal with the losses is discussed.

We compare the Wellington scenario with the latest worldwide loss experience. Recent years have seen an unprecedented increase in the loss burden from natural catastrophes. Since 1987, seven events have occurred, each costing the insurance industry more than the NZ$4 billion postulated for the Wellington earthquake. It is, therefore, safe to assume that reinsurers would have no difficulty bearing their share of the Wellington loss.

Because of the city’s high seismicity and insurance density, reinsurers have been carefully monitoring and analysing the earthquake risk of Wellington for quite some time. Primary insurance companies in New Zealand and other interested parties have already been notified of the results of corresponding model calculations. Swiss Re will not be caught off guard by the extent of a possible loss; on the contrary, our own capacity studies make provision for even higher potential losses.

On the whole, reinsurers should have no difficulty with the Wellington earthquake, although some allowance should be made for the ongoing privatisation of earthquake cover for commercial/industrial risks. There will be enough reinsurance capacity available provided information is explicit enough to enable a precise quantification of the risk and provided the price of the cover is adequate for both insurer and reinsurer.

Introduction to magnitude 8, which is close to the strongest events imaginable. Furthermore, a large part of There should be no doubt whatsoever that Welling- private property (buildings and contents) and of ton will be hit by a big earthquake one day. But for possible business and production interruption in an international reinsurer like Swiss Re Group, will Wellington will presumably be insured against it be just another loss among many? Or at least a not earthquake. This is not the case in other earthquake- quite everyday event with an impact on our profit prone cities like Los Angeles or Tokyo, where the and loss account? Or will it perhaps amount to a insured portion of property is considerably smaller. disaster of totally unexpected proportions, pushing us and other reinsurers to the very limit? It, therefore, goes without saying that the insurance industry, i.e. New Zealand insurers and international The scenario specified for this conference is an reinsurers, will play a decisive role in coping with event of magnitude 7, claiming 1600 lives and the consequences of a major earthquake in the damaging about 40,000 properties in the Wellington Wellington area. region with total insured property damage somewhere around NZ$4 billion (approximately US$2.5 billion). Reinsurance in general Reinsurance is simply insurance one step removed Although Wellington is not one of the world’s from the “man in the street”. Insurance companies largest cities with a population of millions, it is a need to stabilise in time and space the fluctuations in highly interesting location for an international their losses and results, a need that is met by re- catastrophe reinsurer. I can hardly think of another insurance. Reinsurance exists for all the lines of place of similar size that has such a high earthquake business for which there is direct insurance, al- exposure as Wellington. It is literally perched on top though its extent varies with the susceptibility of the of an active fault with an earthquake potential of up business to fluctuations.

255 Wellington After the Quake

To give some indication of the dimensions involved, more exposed to natural hazards) and the increasing the 1992 worldwide premium volume of private comprehensive cover of such risks by insurance. non-life insurance totalled around US$700 billion, of which about US$150 billion, or around 20 percent, If we look at the principal natural hazards of storm, was passed on in the form of reinsurance (Swiss Re, earthquake and flood separately, there are a few 1994a). New Zealand’s non-life premium volume essential differences (Table 1). Insurance against was NZ$2.89 billion in 1992. We do not have storm hazard is fairly comprehensive, as in most figures as to exactly how much of this was re- countries it is automatically added on to fire cover- insured, but it is likely to be in line with the world age. Normally, therefore, the greater part of the average of around 20 percent. The proportion of overall damage to the economy is insured. Earth- reinsurance payments for major losses (e.g. natural quakes and floods cause high fatalities (especially in catastrophes) is, however, much higher. developing countries) and can result in extensive damage to the economy. The insured portion, Reinsurance is especially needed for those lines of however, is usually small, in particular because the business that are prone to major fluctuations. The covers are not (yet) so widespread or are subject to insurance of natural hazards is a classic example. limits or deductibles. What is more, these perils Natural catastrophes, such as earthquake or storm, largely affect the infrastructure (transportation, rarely occur in a specific area. But they affect entire lifelines, etc.), which is normally uninsured. regions and insurance portfolios at a time, simultaneously causing untold amounts of bodily injury, It is important to note that although these losses property damage and consequential losses. It is, place a great burden on the insurance industry, therefore, impossible, over a reasonable period of financial obligations have by and large been met. time at least, to achieve any form of balance be- None of these events has, for example, exceeded the tween premiums and losses in the affected area loss potential assumptions we use to determine our alone. These risks are only bearable to some extent capacity allocation. if they can be spread throughout the worldwide reinsurance system. Loss potentials One thing is certain: matters can get worse. Table 2 Past and future catastrophe losses shows estimates of the possible extent of future insured losses from natural catastrophes. Loss experience A glance at the losses over the past 20 years shows Although our conference scenario only states a that the insured losses from catastrophe events are figure of US$2.5 billion for Wellington, we have put quite clearly rising (Figure 1). There are several it in the category of events from US$5 billion. The reasons for this development. Key aspects include reasons are listed below. It should be borne in mind the general increase in insured values, the greater that the probability of the scenarios given here varies concentration of values in coastal areas (which are greatly. Certain earthquake scenarios (e.g. London

25 Natural catastrophes Man-made catastrophes 1992 n i 20 lid

ces va 15 i pr t 10 ons a billi 5 US$

0 71 73 73 74 75 76 77 78 79 81 82 83 84 85 86 87 88 89 91 92 93 94 1970 1980 1990

Figure 1: World total of insured catastrophe losses 1970-1994 ( Swiss Re, 1995b)

256 Werner Schaad

Table 1: Major natural catastrophes 1985-94

Peril Event/Location/Country Date Deaths Loss total Loss insured billion billion % US$ US$ reins. Storm Andrew, Florida 08/92 15 30.0 15.5 40 Mireille, Japan 10/91 51 5.2 5.2 25 Vivian, Europe 02/90 64 3.2 70 Daria, Europe 01/90 95 4.6 70 Hugo, Carib./USA 09/89 61 4.3 50 Gilbert, Jamaica 09/88 350 1.1 0.8 50 Oct. Storm, Europe 10/87 13 2.9 2.7 50 EQ Northridge, Ca. 01/94 64 30.0 10.0 40 Latur, India 09/93 9500 0.3 Gilan, Iran 06/90 50000 8.0 0.1 Newcastle, Austr. 12/89 10 0.8 0.5 San Francisco, Ca. 10/89 63 7.0 1.0 30 Armenia 12/88 25000 Mexico City 10/85 10000 4.0 0.2 90 Flood Mississippi/USA 06/93 45 0.8 12.0 20 Pakistan 09/92 3800 0.7 China 06/91 1700 Bangladesh 04/91 140000 0.1

or Sydney) are mainly determined by the fact that, replacement value to be an additional 40 percent. although these cities are in low-seismicity areas, This leads to property values of about NZ$39 billion earthquake insurance covers almost everything, so (of which about NZ$12 billion commercial/indus- even a medium-sized event would cause vast insured trial) in zone 10 alone and approximately NZ$73 losses. The corresponding return periods for these billion (of which about NZ$22 billion commercial/ scenarios are, however, well over 1000 years, industrial) in all five zones together. Not included whereas for seismically active regions (California, are business interruption values, which we estimate Japan) or for storm scenarios, time horizons of about to be a further NZ$3 to 5 billion in this area. 100 years are more realistic. Losses: direct insurance and reinsurance The Wellington scenario in detail Figure 2 shows the approximate extent of the area affected by the event outlined in the given scenario, Insured values with insured values (taking the above mentioned The Wellington scenario is shown in Figure 2. NZ$73 billion and including business interruption covers) of about NZ$80 billion. The scenario loss of We do not have any comprehensive data on the NZ$4 billion corresponds therefore to a damage insured values concentrated in the affected area as ratio of about five percent of the affected replace- we do not know how the insurance density of ment value. commercial/industrial risks will look once privatisation has been completed (from 1996). However, data According to the scenario, the loss for the residential is available for property, on indemnity value basis, risks covered by the EQC should be about NZ$2 in 1990. Table 3 shows the values for the main billion. With the current reinsurance programme of affected CRESTA (Catastrophe Risk Evaluating and the EQC, NZ$1.2 billion would remain with the Standardising Target Accumulations) zones. EQC and NZ$0.8 billion be assumed by reinsurance.

These values have to be increased by about 15 How the remaining NZ$2 billion from the commer- percent to allow for inflation from 1990 to 1995. We cial/industrial sector is distributed between insurance estimate the changeover from indemnity value to

257 Wellington After the Quake

Table 2: Estimated extent of possible insured damage from natural catastrophes (* including claims payments from state insurance covers)

Ins. loss Earthquake Storm Flood billion US$ > 40 San Francisco/USA USA east + Caribbean Los Angeles/USA 20-40 Tokyo/Jap.* Japan NW Europe (F/UK/B/NL/D) 10-20 Midwest USA 5-10 Mexico Australia London/UK Israel Hawaii France*+Germany Sydney/Australia Lisbon/Portugal Vancouver/Canada London/UK Wellington/NZ and reinsurance depends on the individual re- impact a natural catastrophe can have. As tens of insurance programmes of the various companies, thousands of losses occur simultaneously, it is which we do not know in detail. Let us assume that practically impossible for insurance companies to 20 percent remains within the insurer’s deductible adjust losses strictly and settle them accordingly. and 80 percent is paid by reinsurance, then the The great demand for repair material and services insured loss remaining for reinsurance totals NZ$2.4 causes prices to explode — at the insurers’ expense. billion (approximately US$1.5 billion). The cost for anti-seismic improvement of buildings — often on the basis of corresponding state provi- As mentioned above, comparison with the re- sions — is, likewise, passed on to insurers. insurance loss of recent years would suggest that this event could easily be absorbed by the international The impact of these aspects is all the greater the reinsurance market, although it is, of course, not more isolated the area affected and the higher the possible to state anything on the proficiency of the insurance density. Wellington would, therefore, be individual market players. As far as Swiss Re Group an obvious candidate for a massive increase in is concerned, our own PML estimates assume a insured damage in the long run. It cannot be ruled market loss significantly higher than NZ$4 billion. Our share thereof, however, will clearly be less than our exposure from other 5 Napier major earthquake and storm scenarios. 8 Wanganui 40˚S Our models even go one step further. We Palmerston North calculate the possible maximum loss burden 7 9 arising from the occurrence of several catastrophe events throughout the world in Masterton Nelson the same year and their corresponding 11 10 IX probabilities so as to have sufficient funds Blenheim VIII for such events. 12 VII 42˚S

VI Reservations 14 Kaikoura 13 It is by no means certain that the insured loss will not exceed these NZ$4 billion. After events such as Northridge 1994 or Newcastle 1989, the insured loss amounts 172˚E 174˚E 176˚E 178˚E continued to rise for months. This phenom- Figure 2: Wellington scenario earthquake M 7.5: Accumulation enon is attributable to the widespread zones and estimated Modified Mercalli intensities

258 Werner Schaad

Table 3: Property values 1990 (indemnity value) per CRESTA zone in NZ$ billion (EQC renewal info)

CRESTA zone Resid./Flats/Rural/Urban Comm./Ind. Total build cont build cont 7 Manawatu 4.43 3.02 0.89 2.40 10.74 9 Wairarapa 1.38 1.03 0.20 0.70 3.31 10 Wellington 11.22 5.60 4.47 3.11 24.40 11 Nelson 1.79 1.11 0.37 0.89 4.16 12 Marlborough 1.03 0.77 0.19 0.54 2.53 Total 7 + 9 - 12 19.85 11.53 6.12 7.64 45.14 out that in time, the NZ$4 billion — estimated one — depending on the quality of the insured objects month after the event — might even double in size. and on the cover conditions.

Risk assessment methods Loss frequency relationship A slightly improved risk picture results if, instead of Method applied merely looking at a scenario in isolation, an entire In reality we are still talking about an impending area is analysed by a simulation. As an example, event and nobody really knows how many casualties Figure 3 shows a loss frequency curve for all of New and damaged buildings it will cause and what the Zealand. This was obtained by combining frequency insured loss will be. and loss effect of all possible earthquakes across the entire country. At Swiss Re, our earthquake under- For reinsurers — as well as for direct insurers — it writing policy has for about 15 years been essen- is crucial to be able to assess the extent of loss in tially based on such analyses. advance and as accurately as possible. This enables us to calculate the premium level we need, and at the This marketwide consideration provides a more same time gives us confidence that when the event comprehensive picture of the earthquake risk and occurs, we are able to meet the obligations we have one that is of greater value to a company conducting entered into.

10.0 For earthquake risk assessment, there are basically four factors that have to be quantified and then 5.0 combined in an appropriate manner, namely: •the seismic hazard, i.e. the frequency and 2.0 magnitude or extent of earthquakes, which can 1.0 be quantified quite well from past earthquakes

with the additional aid of tectonic studies; 0.5 •the vulnerability of insured objects, which can be determined from loss statistics; 0.2 Loss (% of value) •the amount and geographic distribution of 0.1 insured values; and 0.05 •the effect of cover conditions.

0.02 Scenarios

0.01 The easiest way to combine these factors is to model 0.0001 0.001 0.01 0.1 1.0 scenarios. The extent of a major event, for example Annual frequency as shown in Figure 2, is matched with the current with which a specific loss level is reached or exceeded portfolio distribution. The loss amount for this specific event can be calculated by determining the Figure 3: Loss frequency curve for buildings damage ratios with regard to the earthquake intensity alone, all of New Zealand

259 Wellington After the Quake business throughout the country. The integration of increasingly complex and as a result more suscepti- frequency and extent of loss over the entire area (in ble. Insurance coverage of business interruption is the diagram the area under the curve) provides the extensive in New Zealand. It is hardly possible to necessary earthquake premium rate. Moreover, all assess reliably the corresponding damage potential. possible losses, i.e. other significant scenarios, are The covers often comprise so-called reciprocal and included. This is important because it is not clear suppliers extension losses, as a result of which, for from the beginning whether Wellington can be example, plants in Auckland could also claim assumed to represent the worst case potential. A earthquake damage if their production comes to a major event could, for example, also occur in standstill as a result of lost suppliers or clients in Auckland, where the seismicity is lower but the Wellington. It goes without saying that, under such insured values are much higher. circumstances, a scenario calculation restricted to the area with pure physical damage serves no Risk analysis software purpose. The development of natural hazard models has made Problem of branch accumulation great progress in recent years. The calculation of loss scenarios, earthquake premiums or loss frequen- A further important aspect is the possibility of cies using risk analysis software offered by special- accumulation from various branches of insurance. ised consulting firms is now an established part of Apart from damage in actual property insurance as insurance industry activities. such (building and contents), other non-life branches (e.g. engineering, marine, aviation) as well as Generally, these assessment tools enable a far better liability, accident and life insurance will be affected. quantification of the risk. This increases the insur- It is hardly possible to devise a model that accounts ance industry’s readiness and ability to cover these for this damage realistically. risks, as the better a risk can be assessed, the more capacity can generally be made available to cover it. Reinsurance contributions and their prerequisites Uncertainties To what extent will reinsurance be affected by this Despite the positive developments in the field of Wellington event? There can be no denying the natural hazard analyses, the uncertainties surround- anxiety this event will cause. The extent of the ing all model calculations cannot simply be over- insured damage will be considerable. US$2 billion looked. I already mentioned the events at Northridge insured losses would be the second largest amount and Newcastle with the uncontrollable rise in of earthquake damage paid out so far. But com- damage. Northridge is also notorious in that initial parison with other catastrophe losses leads to the estimates of damage immediately after the event conclusion that reinsurance will have no difficulty were far too low (by a factor of five). This illustrates coping with this event. This remark should, how- that the uncertainties of the various model param- ever, be qualified with regard to New Zealand: the eters do not always balance out — in reality, unfa- reinsurance capacity available for one market or vourable influences can accumulate, leading to catastrophe scenario depends on a series of factors, drastic discrepancies between calculated and real the most important of which are business volume, loss amounts. risk information, price and cover conditions.

Problem of consequential damage Volume A particular problem, in both its analysis and dealing A decisive criterion for the reinsurance business with it, is that of indirect losses and consequential policy in a particular market is the ratio between damage, such as business interruption resulting from possible catastrophe damage and business volume property damage, power failure or lack of access, overall. The more the reinsurer participates in the etc. Construction technology in highly developed, entire insurance business of a market, especially the seismically active countries has been refined to a profitable branches, the more catastrophe capacity point where, with more recent buildings at least, the will be available. extent of property damage can be kept quite low. In contrast, processes and operations are becoming

260 Werner Schaad

Information References The importance of adequate risk information has Swiss Re, 1994. Sigma 3/94 and 5/94. already been mentioned. Specifically, this means that the insured portfolios per risk category and per Swiss Re, 1995. Sigma 3/95. region have to be accounted for separately and notified to the reinsurer. This is equally important for insurer and reinsurer to determine the need and the optimal use of reinsurance. The better and more transparent this information is, the more it is possible to optimise the use of the capacity.

Price It is equally important that the reinsurer obtains the proper price for his capacity. This means that the direct insurer must also charge an adequate premium rate graded according to hazard zone and risk quality. A standard premium rate only makes sense in the case of compulsory earthquake coverage (e.g. with the EQC). The earthquake premium itself should not only contain the loss burden but also a price for the available risk capital and a margin to cover uncertainty.

Cover conditions Earthquake insurance has to be technically sound beyond the mere question of premium. In view of the high overall loss burden, it is, for example, essential that policyholders bear a certain substantial part of the loss themselves, ideally by means of a deductible equal to at least two percent of the sum insured. The cover conditions should — in accordance with the severity of the earthquake risk — be carefully formulated, e.g. excluding reciprocal and suppliers’ extension losses.

Conclusion Wellington is for us one of the world’s most fascina- ting places in view of its position and high insurance density. Fortunately, risk awareness is highly pronounced and New Zealand engineers are among the world’s leading exponents of earthquake resistant construction. We, therefore, have no doubt that the New Zealand insurance market will be able to cope with the demands of providing an adequate cover of the earthquake risk, so that insurers and international reinsurers can contribute their utmost to handling this catastrophe when it comes.

261 Wellington After the Quake

262 Sir Frank Holmes

The role of the finance industry

Sir Frank Holmes

Director, The National Bank of New Zealand Ltd, Wellington and Emeritus Professor, Victoria University of Wellington

This paper examines the implications of the Wellington disaster for the financial system, e.g. through its effects on means of payment for retail transactions locally and nationally (which would in turn be affected by the quality of disaster recovery arrangements of institutions) and through its effects on the domestic money and foreign exchange markets.

Special attention is given to what the Reserve Bank and the government might do to stabilise and resuscitate the system (which, of course, requires some assessment of their own disaster recovery capacity) and to deal with any loss of confidence in the solvency of individual institutions.

The paper also considers how the need to fund reconstruction is likely to impact on the various actors in the financial system and analyses the critical issues likely to be involved. Particular attention is given to the response of central and local government to the additional demands having to be made on them and how they might best be financed.

Introduction The big quake also brought home to both staff and customers how dependent they had become on The big quake damaged the providers of financial computer systems, which were seriously affected. services in Wellington, along with other members of Some customers became anxious about the safety of the Wellington community. The head offices of their savings during the period when the financial several major financial institutions suffered serious institutions were bringing their disaster recovery damage. Officers of financial institutions were plans into effect. Both the financial institutions and among the 1600 people who died and the 10,000 the Reserve Bank hastened to assure customers that who were injured. Like many of their customers, there was no need to rush for cash as a precaution. they had their personal property and equipment Those whose incomes were disrupted, particularly destroyed or damaged. Many found it difficult or those who were not eligible for social welfare impossible to get to work or found their places of assistance, were naturally concerned about their work unable to function for some time, especially in capacity to draw on their savings and obtain credit. the central business district. They were among the queues of people seeking to make claims from the The authorities did their best to allay fears, here and Earthquake Commission, their insurance company overseas, about what was going to happen to interest and the ACC, seeking assistance from the health rates and share prices as people sought to turn their system or social welfare or the employment services, shareholdings and security holdings into cash and as and needing credit from the system to cover unex- the government and local bodies began to consider pected deterioration in their financial position. how they might finance the increased demands for public expenditure. The operations of the finance The big quake brought home to their customers how industry have become increasingly global and important financial enterprises are in enabling a subject to overseas influences. These can be cruel if modern economy to function. We depend on the investors lose confidence in the way in which the industry to provide an effective means of payment New Zealand economy and financial systems are and to enable people to place their savings safely. being managed. Many overseas investors were We borrow funds and buy and sell assets through worried about what the overall effect of the quake financial institutions on terms and conditions that would be. Interest rates, share prices and the ex- suit our purposes in the prevailing circumstances. change rate reflected the fluctuations in their They provide opportunities for us to insure against concern. It was fortunate that they could be assured risks. that government and important New Zealand

263 Wellington After the Quake enterprises were much better placed than in the past reasons, government would have to grant such to cope with their short-term problems and to fund support in some measure. But those not insured were reconstruction. The episode emphasised how warned that they would probably wait longer for important it was that our financial enterprises were assistance in rebuilding than those who had insured capable of gearing themselves to continue business and that they should not expect too much. despite the damage to their Wellington operations and to play their part in funding the recovery. The commercial community will be expected to take responsibility for looking after itself in future The financial risk and who carries it disasters. Businesses can be very seriously affected by loss of income and key staff as well as loss of The role of the finance industry in the event of a property. A quake can disrupt a business, not just by large earthquake is much greater now than it was in adverse affects on its own premises, equipment and the past because of changes in the attitude of central staff, but by interfering with the flow of its inputs government towards its responsibilities for bearing and outputs through the adverse effects on clients the financial risk of major disasters. Successive and suppliers. Reduced sales, turnover and cashflow governments since 1984 have been reducing some threaten the financial viability and creditworthiness very large contingent liabilities that their predeces- of enterprises. The longer the down time, the greater sors had assumed. These included responsibilities the danger they will not recover. Many enterprises for insurance against earthquakes. would have found it difficult recently to obtain insurance against loss of profits, although the In a discussion paper preceding recent changes to situation has improved in the last year by compari- the legislation, the Minister then responsible said son with that of two or three years ago, when that the prime concern of government in the event of reinsurance overseas was so difficult to place. Some a major earthquake would be humanitarian — to may find that their insurance is inadequate to cover reduce stress as effectively and efficiently as replacement or to pay for strengthening or upgrading possible, to provide basic adequate housing and their property, which the authorities consider other amenities and to re-establish basic infrastruc- necessary. A guide published by the Ministry of ture such as roads, bridges and water mains. So far Civil Defence indicates that planning and training as insurance against disaster was concerned, policy that will limit damage to property and equipment, would aim to complement, not replace, private sustain post-quake activity and keep staff safe both arrangements. The government, he said, had no at home and at work can be a very worthwhile special competence or social responsibility to investment, especially in disaster-prone areas. Better provide insurance for nonresidential property. preparedness would certainly alleviate the problems Accordingly, EQC cover of such property is being with commercial customers that the finance industry phased out and will end in December 1996. It was would otherwise have to deal with. decided to continue to make it compulsory for people who insure their residences against fire to The Government still provides a safety net, over and take out disaster insurance. However, “to encourage above EQC arrangements, for individuals and residential property owners to make their own families who suffer through loss of breadwinners, arrangements beyond the level where the state has a through injury or ill health, or through loss of necessary contingent liability”, it was decided that income and employment. Such people can have EQC cover on both house and contents should be recourse to one or more of the ACC, the public “capped”, eventually at $100,000 and $20,000 health system, unemployment or other welfare respectively. benefits and emergency assistance. But again, the trend of policy has been towards making individuals The Labour Party had proposed to make it compul- carry more responsibility to provide against such sory for everyone to take out disaster insurance. hazards than was previously the case. Not everyone National opted against this, leaving those who do not has been willing or able to react adequately to this insure against fire unprotected against other disas- policy change. The finance industry’s role in ters. The government paper recognised that the providing effective and secure arrangements to potential “free-riders” would include some who promote and manage savings, to extend credit, and were least able to look after themselves and who to insure against risk for both individuals and were likely to look for support from government if a enterprises has assumed greater significance, even in quake ruined their property. For humanitarian “normal” times, and more so in the event of a major

264 Sir Frank Holmes disaster. It behoves individuals and enterprises both Central government would face a considerable direct to save more and to take care in choosing the increase in expenditure, both for the replacement of financial institutions to which they entrust their public assets and for various “welfare” schemes. savings and insurance arrangements. Some of the capital expenditure would be spread over a period of years, but a large quake would Central government has also reduced its past cause a significant detrimental effect on the annual commitment to take responsibility for all the costs balance of government revenues and expenditure. involved in reinstating water, sewage and other Government would also face a considerable demand essential community services after a large earth- for redemption of government securities maturing quake or other major disasters. Under the govern- during the reconstruction period. The disposal of ment’s Disaster Recovery Plan, local and regional securities before maturity would also tend to have an authorities now have to cover 40 percent of such adverse effect on government-security prices and costs beyond a threshold level. In other words, the interest rates and, therefore, the terms on which the ratepayer rather than the taxpayer must now assume government could borrow new money. that responsibility. The disaster recovery plan also stipulates that, if local bodies cannot demonstrate The EQC funds have been almost completely that they can meet their 40 percent obligation, invested in non-tradeable New Zealand government through proper maintenance, provision of reserve securities. The government would have to redeem funds, effective insurance or participation in a these as required to meet EQC obligations. The mutual insurance scheme with other local authori- means that the government can and will adopt to ties, then central government’s 60 percent of the meet its financial obligations will have a consider- costs will not be available to them. able effect on financial markets, especially as there will be extra demands for funds from the private Local authorities have created a mutual protection sector and other levels of government as well. programme called the LAPP Disaster Fund, open to all local bodies to cover tangible, infrastructural The government has not granted the request by the assets which are generally uninsurable, e.g. water EQC to keep most of its funds overseas. At present reticulation/treatment/storage, sewage reticulation the EQC’s fund totals about $2.4 billion. Since and treatment, stormwater drainage, dams, flood December 1993 $1.0 billion formerly held by EQC protection schemes, seawalls and harbour risks. in New Zealand government securities was invested Government offered local bodies who joined the in deposits at the Reserve Bank. Returns on these are scheme a dispensation from meeting the full 40 linked to those of foreign currency bonds. Therefore, percent obligation, which would phase in over three they are called Foreign Bond Linked Notes. It will years from 20 percent in 1993. I am informed that be noted that the funds are not invested directly in about 50 percent of New Zealand’s local authorities foreign currency bonds but in an official New have joined the scheme. These include all local Zealand security linked to the returns on the foreign authorities in the Wellington region other than the currency bonds. Thus, these EQC funds are pro- Wellington Regional Council, which has elected to tected against the adverse effect of a depreciation of use other means of meeting its obligations. the New Zealand dollar. However, they do suffer a reduction in value if the New Zealand dollar appre- An estimate by Kingston Morrison last year put the ciates, as it has recently. costs of replacing buildings, contents and infrastructure after a major Wellington quake at $8.4 billion. In essence, the government has not been prepared to Of this, the EQC’s maximum probable loss was put see the EQC as a self-contained SOE, managing its at $2.5 billion. Replacement of industrial and funds in the best interests of the enterprise and its commercial buildings (which will not be covered by customers. Rather it sees itself as the real risk taker, EQC after 1996) was estimated to cost $3.8 billion. through its guarantee of the EQC. Thus it has elected The restoration of infrastructure would cost over $1 to compel the EQC to hold its investments in official billion. It is evident that enterprises particularly, and securities in New Zealand and has retained responsi- to a lesser extent local bodies, will be expected to bility for meeting its guarantee to the EQC from carry a high proportion of the costs of reconstruction overseas funds, if required, as an outcome of its own after a quake, with the assistance of their banks, management of the Crown’s foreign currency assets insurance companies and other financial institutions. and liabilities.

265 Wellington After the Quake

The government has relied on its capacity to draw on possible, especially to ensure adequate back-up of its own overseas reserves, or to draw on lines of the critical information systems upon which their credit abroad to the extent necessary to avoid too domestic payments and foreign currency transac- much domestic borrowing or tax increase to cope tions depend. Databank’s major processing centre is with demands for extra government funds after a in Auckland and it has other processing facilities in major disaster. The government would have been centres outside Wellington which should function running a very big risk of being unable to deliver on well in the event of a Wellington disaster. its undertakings if the disaster had occurred a decade ago. Our reserves then were almost depleted and we A 1992 survey by Coopers & Lybrand of corporate were having great difficulty in meeting our overseas security and contingency planning by 367 respond- liabilities. The restructuring of the past ten years has ents in Australia, New Zealand, and Singapore (73 greatly improved the position of the government and from the finance sector and 80 from New Zealand) the nation as a whole. However, our net external indicated that financial sector companies were on debt remains relatively high and its further reduction average convincing leaders over other enterprises for must remain a high priority as part of prudent contingency planning, especially for their computer preparations to meet a disaster, as well as for more systems. However, a significant percentage had not general economic reasons. completed a recent threat assessment, established tolerable outage limits, or tested their plans within The quality of disaster recovery the last year. There has been no specific survey of financial enterprises based in Wellington. However, planning I believe recognition of the need for contingency No systematic review has been done of the present planning has been growing, and that at least the state of disaster recovery planning in the finance larger enterprises are aiming to expand their existing industry. The general insurance industry, along with contingency planning, concentrated on their compu- the EQC, seems to be prepared both collectively and ter systems, into an overall strategy for business (at least for the larger firms), individually, to act continuity. However, the industry is not immune quickly and decisively to meet commitments in the from the tendency to give low priority to expendi- event of a disaster. ture of management time and resources on what are perceived to be less pressing, longer-term eventuali- The Insurance Emergency Plan prepared by the ties, which may not occur during the tenure of the Insurance Council, the EQC, and the Institute of existing top management. This conference, along Loss Adjusters provides for coordination of the with unfortunate events, like the earthquakes at Los efforts of members of these organisations to provide Angeles and Kobe, and warnings, like the recent effective assistance to those who have suffered loss force 7 earthquake concentrated off the East Cape in or damage to their property. Individual companies New Zealand, may help to give disaster recovery a have done a great deal of disaster recovery planning, higher ranking in the planning process and acceler- For example, the company of which I was recently ate the progress that has already been made. Chairman made the preparation, testing and implementation of a comprehensive disaster recovery plan Likely strains on the industry in the the responsibility of a very senior manager. I was short-term satisfied before I left late last year that he and his team had made very good progress at Wellington The Reserve Bank has special responsibility to head office and branch level. promote “the maintenance of a sound and efficient financial system” and to avoid “significant damage The banking industry has had little collective to the financial system that could result from the discussion through the Bankers’ Association on the failure of a registered bank”. issues involved in a major disaster. I am also advised that the Life Offices have not seen fit to involve the It has been tightening up its own system of crisis Life Offices Association in addressing the issues of management. Its plan, which it expects to implement either disaster recovery or funding the reconstruc- fully by mid-1995, envisages the appointment of a tion. Individual enterprises seem to be at various manager designate in Auckland who could take over stages of development of disaster recovery planning. its functions if management in Wellington could not All major banks have in place some provision to operate for a time. The Auckland branch has been restore normal facilities for customers as rapidly as physically stocked with computer facilities (with the

266 Sir Frank Holmes bank’s systems backed-up there daily). This would major responsibility of the central bank to ensure enable continuation of inter-bank settlements, the that liquidity is available, either directly or through provision of liquidity to facilitate settlements, and the stronger institutions, in a manner which will the implementation of monetary policy. The Auck- prevent loss of confidence in a particular institution land office might also have to manage foreign from threatening the integrity of the payments reserves, including any authorised intervention system as a whole. deemed necessary to help preserve an orderly foreign exchange market. Official policy in the last few years has been based on the philosophy that neither the government nor The Reserve Bank has particular responsibility to the Reserve Bank should guarantee the safety of preserve the integrity of the payments system. A investments made by private citizens or the contin- large earthquake could lead to an unusually large ued solvency of particular financial enterprises. It demand for cash if other systems of payment, e.g. does, however, insist that customers of the institu- direct credit, ATMs, EFTPOS were temporarily tions should be well-informed and not subjected to disrupted in some Wellington locations. The bank false or misleading information. In banking and could be expected to ensure that there was no insurance, regimes of prudential surveillance are shortage of currency to prevent financial institutions being put in place which require enterprises to from satisfying legitimate demands for cash. obtain and publish credit ratings from an approved agency and to disclose that rating to customers. The A more important problem would be the uncertainty major aim is to ensure that the boards of directors created by the quake in the money and foreign and managements of institutions take full responsi- exchange markets and on the stock exchange. It bility for the strength and solvency of their own would take time to get an overall assessment of the enterprises. Moreover, while the Reserve Bank does scope of the disaster and its likely effects on produc- not guarantee the solvency of particular institutions, tion and trade, interest rates, and exchange rates. and will not tell us in advance what it will do in the Overseas investors, in particular, may overestimate event of a crisis, it does accept an overall responsi- the severity and duration of the adverse effects. bility to keep the payments system as a whole Through large precautionary movements of funds functioning, through use of its capacity to be a they could cause interest rates to rise and the New provider of liquidity and lender of last resort. Zealand dollar to depreciate to an extent which was unjustified by the real situation. (Reports of a force 7 If the potential failure of a financial institution quake off the East Cape recently, though it caused appeared to be a threat to the integrity of the system, no appreciable damage, were enough to provoke either the government or the Reserve Bank could use some overseas precautionary action.) The Reserve powers to appoint statutory managers to that failing Bank would be expected to play a vital role in institution. The bank has proved reluctant to do so, allaying concern, using its powers judiciously to but a statutory manager was used for the Develop- stabilise the financial markets, gathering and ment Finance Corporation and again for the Public disseminating information on how the financial Service Investment Society many years ago. system was coping with the crisis, and reassuring participants in the market that appropriate responses Overall, caveat emptor (let the buyer beware) is the were being developed through an informed consen- general rule confronting New Zealanders who deal sus on the issues to be confronted. with financial institutions in New Zealand. When you contemplate the implications of a major quake The bank would need to monitor closely the capacity for your capacity to obtain repayment of your funds of banks and other financial institutions to cope with or to collect your insurance, you must ensure that the effects of the increased demands of customers to you are dealing with an institution that is capable of withdraw funds and/or to obtain additional credit. dealing with a crisis. There has been some justifiable The security for some loans would obviously be concern that the past loose regulatory regime adversely affected: bad debts would increase and the governing general insurance institutions would allow value of some of the assets on balance sheets would the entry of “fly-by-night enterprises” which could fall. There would be a danger of loss of confidence collect premiums against earthquake but would be in the safety and solvency of some institutions. This most unlikely to be able to honour their commit- is unlikely to be the case for major banks, especially ments if there were a major disaster. The new those who have strong overseas parents. But it is a regime should give more protection against such

267 Wellington After the Quake institutions. As an elementary precaution, you foreign exchange available to the New Zealand should regularly review the strength of the institu- economy in the process of recovery and reconstruc- tions to which you are entrusting your funds. tion. This would help to alleviate any tendencies for the exchange rate to depreciate as imports were Our banking system seems to be well placed to ride brought in to supplement domestic supplies. out a crisis. The general insurance industry is also very much better placed to deal with such an Of course, should New Zealand have to draw eventuality than it would have been three years ago. heavily on this reinsurance, it is likely to have some At that time, many were not able to make underwrit- adverse effects on the terms on which future re- ing profits and the average solvency level was lower insurance would be available to the country. This than usual. Since then, there has been considerable consideration lends emphasis to the importance of restructuring in the industry, and the average continued improvement to the financial strength of profitability and solvency ratios of participants have all elements of the New Zealand economy. New improved considerably. Zealand’s growing external debt in the 1970s and 1980s was a reflection of serious overspending and The EQC, State Insurance and NZI have some of the weaker balance sheets of New Zealand government, highest individual catastrophe programmes in the businesses, and households, facilitated by lax control world. New Zealand is particularly subject to the over domestic money and credit. As a result, we vagaries of the world reinsurance market including undermined our capacity to cope with a crisis. There its reactions to other people’s catastrophes. The are much stronger grounds now for confidence in the increase in the difficulties and costs of obtaining capacity of private enterprises, financial institutions, reinsurance in the early 1990s and the extra respon- and central and local governments to deal with the sibilities thrust on domestic insurance companies effects of a major quake in Wellington. Continuation because retentions were increased and event limits to of the sorts of policies which have contributed to the insurers were introduced by the reinsurers, inevita- improvement, by sustaining that confidence, would bly led to increases in premiums in New Zealand. help to limit adverse effects of the disaster on the Moreover, a more conservative approach was taken continuity of business and on interest rates, share to the insurance of older, risk-prone buildings and to prices, and the exchange rate. Averting instability in loss of profits cover. Recently the entry of new financial markets would greatly ease the problems of players in the market has made it somewhat easier funding recovery and reconstruction. for domestic insurers to obtain reinsurance. Because New Zealand’s overall reinsurance programmes and Funding of reconstruction likely demand for reinsurance are small relatively to the capacity of the world market, and because we Some people have unkindly suggested that a disaster have not made large claims in recent years, most in Wellington would have little impact on New New Zealand insurance companies have been able to Zealand’s export trade and gross domestic product. limit to manageable levels their own direct expo- Only a relatively small proportion of New Zealand’s sures to a major quake in Wellington. For example, output of primary products and manufactures comes State Insurance has provided cover of $6.5 billion to from Wellington, so that the direct effects of an customers in the region of which Wellington is the interruption to production here on merchandise centre. It has reinsured its maximum probably exports would not be great. However, the indirect liability of $745 million for this region under effects on the inputs and outputs through the country catastrophe and surplus treaty arrangements, and of disruption of Wellington’s important contribution would have to find a maximum of $30-35 million to the transport of goods by sea and rail would be through excesses and co-insurance provisions in its significant. So too would be both the direct and catastrophe programmes. indirect effects of disruption of its financial, administrative, communication, information and marketing Overall then, the general insurance industry seems services, for example. It would be important for well placed to cope with its responsibilities to New Zealand as well as for Wellington that its customers in the event of a major disaster. The productive capacity should be restored as quickly as reinsurance arrangements which it has made, along possible. with the $1.2 billion placed by EQC, and the commercial insurance privately placed overseas, For an eventuality like that which we are assuming would together make a significant contribution to the here, contingency planning should rate more highly

268 Sir Frank Holmes in all sectors of the economy. This should certainly coordinating recovery and reconstruction and in extend to the finance industry. Its institutions should minimising destabilising bottlenecks. not only step up the quality of their individual recovery plans, but also plan collectively through a Coordinating and contingency planning process in which the Reserve Bank, Treasury, and the Debt Management Office should be playing a Recent developments in government, which I regard central role. as generally most desirable, have reduced its direct participation in economic activity and exposed The total bill of $8.4 billion to replace housing, domestic producers to greater competition to serve commercial buildings, contents, and infrastructure customers well. These developments mean that old may be compared with the total annual gross fixed approaches to dealing with a crisis would no longer capital investment in New Zealand. This averaged work. A new and more market-oriented approach to between $12 and 15 billion per annum from 1989- coordinating policy would be required. 1993, and has probably increased to about $18 billion in 1994-95. Wellington’s share of GDP is In the absence of the old Ministry of Works, the about 13 percent and so capital formation here has government would need to give leadership in probably been fluctuating around $2 billion recently. planning or implementing priorities in the crucial The demands on the building industry in a crisis programme of reconstruction of the infrastructure would be particularly strong. Kingston Morrison put and other public facilities in consultation with the replacement cost of buildings at around $5.6 regional and local authorities and those now respon- billion. This compares with annual expenditure on sible for power and communication. The key here, new buildings in New Zealand at about $5 billion. as with the preservation of financial stability and the The reconstruction programme required in Welling- funding of reconstruction, is for government and its ton might be diminished to some extent through official agencies to provoke and assist participants in decisions by some enterprises and others to relocate the markets concerned to anticipate potential outside the Wellington region. Unless they closed problems and to devise appropriate mechanisms and down or found under-utilised capacity, however, this policies through which appropriate responses will be would not diminish what would potentially be severe made. These problems include shortages of labour, pressure on available supplies of equipment, materi- materials, and equipment. Success on this front, als, and labour. The path of wisdom would be to including readiness by government to gear its phase reconstruction over a period of four or five employment service, training programmes, and years if possible. immigration policies to ease potential shortages of labour, would greatly ease the task of preserving The finance industry would have to play a very reasonable stability of prices. important part in funding the process of recovery and reconstruction. Shortages of supply, aggravated Government has recently shown some interest in by any depreciation of the exchange rate in response devising strategies for development over the me- to the crisis, would pose a severe challenge to the dium term. However, the central agencies of the Reserve Bank in carrying out its primary function of Crown in the financial sector, other than the EQC, preserving price stability. The bank would require seem reluctant to go beyond disaster recovery nice judgement to decide how far it should relax planning to sustain their own activities. We are monetary policy in order to accommodate the dealing with an eventuality whose scale and timing “supply shock” without unnecessary adverse effects is unpredictable. Agencies like Treasury and the on output and exports, while preventing the one-off Reserve Bank do not seem to see much merit in increase in prices from initiating an inflationary starting from a scenario like that given in this spiral. conference as a basis for trying to anticipate critical issues with which they might have to deal in the The government and the bank should recognise that financial system as a result of a major Wellington the preservation of economic stability could not be quake. left to monetary policy alone. There would probably be no great support now for a reversion to rationing The Reserve Bank recognised that it must play a key of some supplies and direct controls over prices and role in sustaining confidence and safeguarding the wages in any substantial way. However, the commu- payments system. However, for reasons of ‘moral nity would rightly expect government leadership in hazard’ among others, it was reluctant to be too

269 Wellington After the Quake precise about how it would do this. The new systems the solvency of the EQC and on whether the EQC or of prudential surveillance would, it was contended, the government (which the Treasury regards as the put more pressure on directors and management of real risk taker) should take the decisions on whether financial institutions to strengthen their capacity to or not funds collected for earthquake insurance meet such a crisis. This would make intervention by should be invested overseas. I see merit in extending the central bank less necessary. work of the kind which the EQC has commissioned on these issues to cover a broader front as back- I see value in an occasional contingency planning ground for a contingency planning process. exercise, starting immediately after this conference, and involving Treasury, the Reserve Bank and other One can legitimately query the validity of some of major participants in the financial system. Such an the assumptions which the Kingston Morrison team exercise would seek to anticipate the major issues made in the EQC exercise, especially the large which would confront the participants, and those depreciation of the New Zealand dollar which it responsible for the implementation of monetary and would expect. This analysis seems to have too little economic policy, if a major earthquake occurred in regard for the supplies of foreign exchange which Wellington tomorrow. It could well uncover poten- would be available from reinsurance, private tial weak spots in the financial system which might insurance overseas, government borrowing, infusion threaten to destabilise it unless corrected. It could of capital by overseas owners of enterprises, and illuminate the issues which would confront the bank other foreign assistance with reconstruction. Moreo- in sustaining price stability. It could provoke ver, given a continuation of good domestic policies, consideration of whether the rather fragmented the “shock inflation” expected in New Zealand as a arrangements for coordination of financial and result of depreciation and shortage of supplies also economic policy now prevailing would be adequate seems excessive. We need discussion among both to deal with such a crisis or require special machin- official and private members of the finance industry ery; and it could stimulate discussion on whether on what the demand for and supply of funds for there might be “gaps” in the provision of certain reconstruction overall (not just for the EQC) are types of finance to meet such an emergency, e.g. the likely to be in the event of disaster, with some availability of equity finance (or temporary substi- particular reference to the availability of overseas tutes for it) which would help carry worthwhile exchange. enterprises through their temporary difficulties without becoming excessively indebted. This might The EQC was right to emphasise that whoever require collective action in addition to what indi- assumes responsibility for ensuring that New vidual financial enterprises would be able to pro- Zealand can cope with a major national disaster vide. should pay special attention to building up adequate reserves and accessible lines of credit overseas to The Treasury (and the Debt Management Office) meet likely requirements during the crisis. New prefer to rely primarily on the operation of market Zealand has shown the dangers that can arise if a forces, backed by a continuation of strong and country has a government that ostensibly collects responsible macro-economic and constructual funds to provide for such a disaster, but in fact treats reform policies, as the best preparation for New them as just another source to finance current Zealand to cope with a major national disaster, domestic expenditures and follow overall policies wherever located. I agree with that view, but the that exhaust overseas assets and increase overseas case for it would be strengthened through occasional liabilities. Happily, current policy settings are contingency planning exercises for disaster, of the making it possible for us, if we persist, to reverse type which I propose. those trends quite rapidly. I see value in extending the “probability of ruin” approach to the assessment The EQC appears to have had difficulty in persuad- of contingent liabilities and prudent net reserves in ing the Treasury to take seriously the modelling the public sector as part of a wider contingency exercise which it has done to try to assess the planning exercise for the finance industry as a “probability of ruin” for EQC because of the exhaus- whole. tion of its reserves, and to establish a case for holding a much higher proportion of its reserves overseas, including overseas equities. The debate has had a rather narrow focus. It has concentrated on

270 Discussion Insurance and financial markets

teve Gentry (Kingston Morrison Ltd) stated Bill Ferris (Public Trust) asked what EQC was that at the time of the Inangahua earthquake doing to ensure that with the new limit of EQC S(1968), he had arrived there as an insurance insurance on domestic properties, underinsurance claims assessor at the end of the rescue phase and does not become a major problem. David Middleton before the recovery phase. His company’s contract replied that individual homeowners now have the was with the Earthquake and War Damage Commis- responsibility for topping up their earthquake sion, but the civil defence controller had total insurance. EQC will cover $100,000 (plus GST) for control. As a result, he spent his first three to four the house and $20,000 (plus GST) for the contents. days there looking after civil defence matters and This is sufficient for most people and few houses asked if there was a similar arrangement now. David will need more than that. The responsibility of EQC Middleton replied that a protocol has still to be is to put a roof back over people’s heads, but a arranged with the Ministry of Civil Defence and this homeowner wanting a fancy roof will now have to is one of several significant agreements yet to be pay extra for it. sorted out. Dick Carter (Port of Wellington) asked if, as a result Colin Packham (Mercantile and General) asked of experiences following the Newcastle earthquake, Peter Yanev about the main determinants of the insurance companies might be more flexible in unexpected increase in insured losses. Peter Yanev future as to how claims should be handled. Chris replied that those were listed in his paper. However, Henri replied that with insurance companies com- fraud was quite a major factor in escalating pay- peting for business, there were wide differences in ments by insurance companies after the Northridge what damage they covered and in premiums, earthquake. Probably twice as much was paid out as sometimes between close neighbours. This caused should have been. Underinsurance was another considerable problems. However, insurance compa- important factor. nies did co-operate with each other to some extent. Following the Newcastle earthquake, arrangements Peter Leslie (Wellington Regional Council) said that were made to call insurance companies together utility insurance was a major concern for his council. during the reconstruction period to resolve problems He asked what is likely to happen to insurance and to help maintain the image of the insurance premiums in the aftermath of the Kobe earthquake. industry. However, in the end it comes down to the Chris Henri replied that premiums are likely to rise individual contract between a homeowner and an as a result of Kobe, but disaster events are happen- insurance company. ing at regular intervals all around the world. How much premiums will rise for the homeowner whose Colin Packham (Mercantile and General) asked how policies and premiums were meant to cover all the map of Modified Mercalli intensities for an contingencies will depend on how much reinsurers earthquake in the Wellington region used in Werner want to claw back from insurers by raising their Schaad’s paper (Figure 2) had been derived. Werner premiums. The increase in premiums will only Schaad replied that microzoning information was become noticeable if the drawdown as a result of used as well as elliptical intensity curves. Kobe and other recent disaster events becomes significant. Peter Yanev said that worldwide, David Hopkins (Kingston Morrison Ltd) said his insurance premiums are very low for earthquake paper at this conference was a follow-up to a report compared with what they should be as a purely by Kingston Morrison last year, which was referred business decision. In the USA, the total premiums to by Sir Frank Holmes in his presentation on for earthquake insurance for the last 30 years were estimating replacement costs of buildings following used up by the Northridge earthquake. Most insur- an earthquake in Wellington. Dr Hopkins said that ance companies have lost more than they expected zonation had to be considered. All buildings might and, as a result, premiums have increased dramati- be at high risk, but some would be more so because cally (from 50 percent up to 150 percent). the single most important determinant was the building itself. The wide range of uncertainty of

271 Wellington After the Quake replacement costs is something that will have to continue to be lived with. The tools used, such as damage ratios, all had uncertainties, although they provided insights. He said that Kingston Morrison are trying to match their work against estimates for replacement cost that EQC has already obtained and this is regarded as a suitable basis for estimating the cost of physical reconstruction. Sir Frank Holmes agreed that although subject to uncertainties, the exercise was still very useful because it did at least give an order of cost.

John Blakeley (Centre for Advanced Engineering) asked Sir Frank Holmes who in central government should provide leadership in the contingency planning exercise suggested in his paper in the absence of the old Ministry of Works. Sir Frank Holmes replied that Treasury should be central, in particular, the Debt Management Office. However, he would also hope that organisations such as the Earthquake Commission, the Insurance Council, the Bankers Association and the Life Offices Associa- tion would also see merit in pressing for such an exercise to be carried out, or take an initiative themselves.

Dieter Losse (Greig Fester, London) asked Werner Schaad about the stability of construction prices before and after the earthquake scenario. Werner Schaad replied that construction prices were subject to cycles according to supply and demand. Given that the Wellington event could be coped with, he did not think there would be any great effect on construction prices.

272 Ian McLean

Conclusions

273 Wellington After the Quake

274 Ian McLean

Looking forward from the conference: Where to now?

Ian McLean

Chairperson, Earthquake Commission, Wellington

rising from this conference, many people through the consultation and decision processes with will have ideas about the future direction of due deliberation and care, without the stresses of the Aearthquake recovery planning in general immediate response to disaster or the huge pressures and the Earthquake Commission in particular. from the affected population to restore some normal- Participants are invited to send their comments and ity to their lives right away. ideas to the EQC, because this feedback is one of the outcomes we wanted from the conference. Thirdly, in any disaster the people who are affected will want to know — Who is in charge here? The A great many proposals have been made and second session described the relations between those discussed — some of them conflicting. A great responsible for emergency management in central many perspectives have been glimpsed, and a great and local government. The precise sharing of many questions have been asked. However, there responsibility for the organisation of disaster has also been a good degree of unanimity about recovery, to the extent that it has been determined, is several of the issues raised. Above the mists a few not widely known. Things have changed with the mountaintops have emerged as clear and distinct. In passing of the Ministry of Works and Development. answer to the questions after a disaster — What There is now no public works department. No happens next? What do we do now? — the confer- arrangements have been made to replace its key ence has provided these answers. national role in disaster recovery. Organisations have been restructured, and it is not always clear any First and foremost, planning for recovery from any longer who does what. This is a real issue, and it disaster is not just about bricks and mortar — it is needs to be addressed urgently. Now is the time to about people as well as buildings. And the people determine with the utmost clarity what the arrange- are not all middle-aged men of European extraction ments will be. There is no time after the disaster for well versed in insurance practice — they come in all a committee to sit down to try and decide who is in shapes and sizes, children and old people, men and charge and how responsibilities will be shared. women from a wide variety of ethnic and social backgrounds. They have diverse needs, some will be Next, the ownership of the rebuilding plans has to be hungry and frightened and homeless, and English shared by many different groups: government, the may be a second language to them. They will want regional councils, city and district councils, the to rebuild their lives while the politicians and insurance industry, private business, and local engineers and planners will want to rebuild their communities. It is not the same as the immediate city. response phase, when the local and central government play the dominant roles. The private sector The time to plan for rebuilding is before the disaster, needs to play a part. not after it has happened. That is another clear message that has emerged from many of the papers Any system that is devised needs to be applicable to presented here. The time to decide what city we any city in New Zealand. It needs to be widely want to recreate is when the sun is shining and when understood and ready in advance. Moreover it needs society is stable and settled, not amid the chaos and to be tested in advance. destruction of an emergency when funerals are being arranged and when priorities have to be assigned on Who sets the priorities? It would not be acceptable, I the spot and quick actions have to be taken. We need am sure, if prominent and wealthy people were able to know in advance what we want to restore, what to repair their swimming pools while hospitals await we want to redesign, and what we want to relocate, repair. At the other extreme, it would be equally so that people already know what is to be done when unacceptable for people to have to form long queues the time comes and can move to implement the plans to get papers stamped by bureaucrats before they for recovery efficiently. We need time to work could get their toilets fixed.

275 Wellington After the Quake

The logistics of the situation are formidable, as we Wellington city and have drastic repercussions for have heard and seen from several speakers with the nation. The different sectors will have varying first-hand experience of overseas disasters. Who capabilities to absorb the costs that will arise. As plans for the temporary facilities to be provided? For well as in the insurance and reinsurance industries, the transport in of heavy equipment on roll-on roll- whose business is to provide for these types of off barges? How is the accommodation for the 500 situation, these costs will impact directly on local to 10 000 workforce and their supervisors to be businesses and local government. The reduction in organised, not to mention thousands of refugees? incomes will flow on to central government by the Are they to be billeted? Are ocean liners to be used greatly reduced tax take from families and busi- as floating hotels? Who plans all of this — the nesses hard hit by the disaster. The challenge again regional or city councils, the Ministry of Civil is for organisations to have thought about this in Defence, or the DESC organisation in the Prime advance. Have you assessed what your costs might Minister’s Department? be? Have you contingency plans in place to enable you to continue to operate? Have you identified your We have heard how the lifelines studies have sources of finance for recovery? progressed, the roads, power lines, water supplies, and so on. Until they are fixed, nothing else can be We have heard of the probable timescale for rebuild- repaired. The decisions cannot be left solely to the ing, and best estimates seem to put it at four or more providers of the lifelines services. Consumers as years. The restoration of lifelines — communica- well as the lifelines providers have a stake in tions, transport systems, power supply — as well as ensuring that mitigation work is done and recovery hospitals and schools would come first. Then plans are made. For Wellington we have heard about attention could turn to restoring homes, factories, the Transmission Gully proposal, an alternative and offices, and so on. Where will you be in that route which, unlike the present state highways in and timescale? How will you survive — or will the cost out of the cities, could be relatively immune to of business interruption be too great for your damage from a major earthquake. After the disaster, business to survive? There are several things you if there is not a road up there it will have to be built, can do now to plan to recover your business opera- so it makes sense to factor in now the strategic tion. Firstly, make sure that you are in a safe, strong advantage this would have for Wellington. building, i.e. one that is well designed to code. In addition, you should be talking to the utility provid- Another important aspect we have heard about is the ers to make sure they have a good lifelines restora- planning legislation. Laws which in normal times tion plan. Another safeguard for larger organisations are arguably a procedure for obtaining the best is to have a management contract set up beforehand decisions from all perspectives would cause unwork- with a major construction firm to come in promptly able delays to efficient rebuilding. The whole raft of to help to get you up and running again, for example legislation — the Resource Management Act, the a full set of the plans of your buildings could be held Building Act, the Occupational Safety and Health by the construction company. The cost would be Act, district plans — would need to be modified or relatively small compared with the cost of delays in overridden just to enable things to happen. There rebuilding. will be some zones that the council would not want people to rebuild on. Perhaps those zones should be A final important conclusion to come from this designated now as places to be used differently in conference is that it is foolish to try to reinvent the future. Why not legislate now for the post-disaster wheel — it is costly and unnecessary for any country situation, so that it can swing into effect immediately to ignore the knowledge of those with a wealth of following a disaster? experience of disasters overseas; it is costly and unnecessary for each local authority to invent its Several estimates have been made of the cost own recovery plan. Most places in New Zealand implications of the Wellington quake for the local have some sort of hazard to worry about. It is and national economy. The differences between sensible for all organisations concerned to get them appear to result from different estimates of together to share information and to outline the damage ratios, and inclusion or exclusion of costs of common principles that apply to all recovery business interruption and indirect costs. However the undertakings. figures are derived, everyone would agree that the sort of costs incurred by Kobe city would frighten

276 Ian McLean

Finally, while the role of the private sector is important in the response phase after disaster, it becomes dominant in the reconstruction of devastated cities. Homeowners, the insurance industry, and owners of buildings and businesses will effect their own reconstruction. Much can be done in advance to ensure that they can work effectively to restore normality to the city.

The questions which we each will face as we seek to recover from a disaster can be put in advance: What happens next? What do I do now? And the answers can be ready in advance.

This conference has shown that there is available a great deal of experience and knowledge about disaster recovery. I hope that the conference has opened the door to fruitful use of that knowledge in establishment of sound recovery plans for the future. The conference is over. The work is now to be done.

277 Wellington After the Quake

278 Index

A collapse 5 construction 151 Abala-Bertrand, J M 66 damage 10 Accident Rehabilitation and Compensation Insurance defects (pre-existing) 238 Corporation 194 bulldozers 128 accommodation 9, 151-152 business 197 adjusting practices 223, 225 community 142 administrative capability 98, 99, 103 interruption 242, 260, 264, 276 affordable housing 186 recovery 87-89, 93 aftershocks 99 small 8, 87 Age Concern 184 air freight 146 airport 5, 113, 114-115 C Anchorage, Alaska earthquake Cabinet office 19 see Valdez, Alaska earthquake Cameron, R P 163 architecture 58 capital city 15-20, 17, 25, 102-103 Armenian earthquake capital markets 68-70, 72 see Spitak earthquake Carter, Dick 271 Arthurs Pass earthquake (1994) 148 central business district (Wellington) 48, 59, 151 asbestos 242 central claims bureau 234-235 Ash Wednesday bushfires (1983) 195, 234-235 central government ashfalls 211 see government see also Pinatubo eruption Centre for Advanced Engineering lifelines study (1991) Auckland water crisis (1994) 36, 168, 191 48, 53, 90, 104, 112, 120, 148, 149, 154, 155, 189, 252 Australian Insurance Contracts Act Cessnock earthquake (1994) 242 see legislation chartered liner 140 availability of resources 122 Christianson, John 145-155, 157, 158 city character 55-56 B Civil Defence Act see legislation backup systems 192, 203 Civil Defence Emergency 246 Bailey bridging 147, 149 Civil Defence Review Panel 16, 121, 133 ballast 128 claims assessors 247 Bankers Association 272 claims reporting centre 234-235 Baguio City 210, 213 claims settlement 231, 248 Baguio earthquake (1990) 145-146, 209-210, 211-214 Cliffe, Hon Bruce 191-195, 197 Barker, W H 162 Coalinga earthquake (1983) 48, 50, 52, 218 Bay of Plenty earthquake Cochrane, Hal 65-79, 93, 157 see Edgecumbe earthquake command centre 203 Black, Dennis 65-79 Commissioner for Disaster Recovery 167 Blakeley, John 61, 93, 157, 272 communications 62, 203, 249 Bolin, R 26 cellular and satellite 143, 203 branch accumulation 260 community 24, 183 bridges 114-115, 148, 149, 194, 203, 206, 213 continuity 82 Britton, Neil 23-33, 35, 36 Maori 176-177 broadcasting 114-115 mental health 45, 187-188 Brunsdon, David, 35, 93 community halls 178 budget (Kobe) 203 community recovery matrix 101-102, 105-110 Building Act community support services 8, 183-189 see legislation components of recovery 24 building approvals 239 concrete supply 124 Building Code 168 consent process 163-164, 166 building codes 112, 204, 220, 233 construction industry 66, 123, 133 building industry 269 construction costs 119, 123 Building Industry Authority 163, 168 container cargo 150 building inspectors 152-153, 239 contingency planning 11, 266, 269-270, 272, 275, 276 buildings 48, 114-115, 116, 124, 150-153, 210, 213 continuity of care 184-185 betterment of 239

279 Wellington After the Quake

Contractors Federation 133, 153 economics 11, 65-79, 93 controller emergency forces 17 economic disruption 65, 67-70 conveyancing 239 economic policy 11 co-ordination (of recovery) 7, 9, 23-32, 183, 269-270, 275 economic stability 269 co-ordinators 36 economic viability 142 counselling 184, 187-188, 207 Edgecumbe earthquake (1987) 48, 81, 121, 131, 145, 146, cranes 128-129, 202 153, 157, 158, 178, 197, 246 CRESTA (Catastrophe Risk Evaluating and Standardising education 185, 213 Target Accumulations) 257, 259 elderly 45, 85, 184, 185, 201 cross-cultural comparisons 82 electricity supply 5, 88, 89, 114-115, 127, 202, 206 Cuff, Ross 61 emergency commission 165 cultural awareness 8 emergency legislation 168 cultural values 43 see also legislation currency bonds 265 emergency management 7, 26, 98, 194, 275 Cyclone Bola (1987) 28, 195, 197 emergency management system 25, 30, 31 Cyclone Tracy (1974) 31, 157, 230-234 emergency phase 121 see also Darwin emergency planning 36, 201-202 employment 68, 131, 132, 185, 187 environmental impact 165 D EQC damage assessment 9, 44, 112-113, 236 see Earthquake Commission damage ratio 113, 276 EQCover 245, 250 damage value 117 equity 45 Darwin 31 equity finance 11 see also Cyclone Tracy essential resources 25 Darwin Reconstruction Act ethnic groups 86, 184, 185, 197, 213 see legislation evacuation 178, 186, 194, 213, 233 Darwin Reconstruction Commission 232-233 excess 197-198, 221, 223, 224-225 de Jesus, Jose 209-214 extended family 83-85, 176 debt 69, 70 debt crisis 69 Debt Management Office 269, 272 F decisionmaking 44, 98 family life 82 deductible family outcomes 197 see excess family recovery 83-87 delegation of powers 36 Feast, John 161-169, 171, 197 demand for resources 122-124, 184 Federal Emergency Management Agency (USA) 98, 103, demolition 9, 119-123, 149, 152, 226 142, 153, 158, 165 Department of the Prime Minister and Cabinet 19, 28, 29, Federal Response Plan (USA) 103 276 Ferris, Bill 271 design code 93 financial crisis 72 developmental reconstruction phase 81 finance industry 269 devolution of assets 37, 61 financial disabled persons 184, 185, 186 management 142 Disabled Persons Assembly 184 markets 250 disaster action plan 248 policy 11, 69 disaster loans 87 risk 264 disaster management 23, 214 financing mechanisms 8 disaster recovery co-ordinator 28 fires 205, 206 disaster recovery plan 165, 265 fiscal policy 69 district plan 163, 166-167, 276 flood mitigation 157 Domestic and External Security Committee 36 ford 149 Dynes, R 82 foreign aid 143, 203, 212 fraud 239 French, Steven 47-54, 61 E Friuli earthquake (1976) 27 Earthquake Commission (EQC) 10, 193, 245-252, 265, 268, 270, 271, 272 alternative site for 248 G Earthquake Commission Act (1993) 193, 245 Gabion retaining walls 148 EQCover 245, 250 Gardiner, Wira 175-179

280 gas supply 89, 114-115, 202, 206 indirect losses 66-67, 71-72 geographic information systems 51, 219 indirect losses (Wellington) 70, 73-74 Gentry, Steve 271 inflation 157 government short-term 224 agencies 19 information hotline 142 bonds 203 information sharing 276 central 18, 24, 25, 30, 165, 191-195, 197, 248, 264- infrastructure 5, 51, 52-53, 111-112, 147, 248-249 266 see also lifelines continuity of 7, 17, 18-20, 35, 191, 192 inspection system 247 levels of 24 institutional arrangements 27 local 24, 25, 61, 87-88, 197, 238-239 insurance 10-11, 93, 157, 194, 201, 217-226, 245-252 securities 265 assessors 152 Governor-General 167 companies 229-243 Greig, David 36, 93 industry 268 gross domestic product 11, 66, 69, 70 premiums 261, 271 ground accelerations 48, 221 insurance emergency plan 10, 132-133, 246, 266 ground motions 10, 222-223 Insurance Emergency Service (Australia) 229-230 ground subsidence 5 Insurance Council 272 growth areas 213 insured losses 10, 93, 217, 220, 221-222, 256 Guam earthquake (1993) 23, 226 insured values 257 interest rates 69, 72, 263 international aid 9, 139, 148, 197 H International Decade for Natural Disaster Reduction 116 Haas, J 27, 81 international investors 213 Hall, Martin 93 inventory of hazardous buildings 51 Hanshin earthquake (1995) 10, 11, 23, 37, 44-45, 71-72, investment liquidation 250 73, 84, 88, 93, 98, 112, 142-143, 201-204, 205-207, investor confidence 263 210, 218, 224, 226, 271 isoseismal 4, 113 hapu (whanau group) 176 iwi (tribal group) 176 hardfill 127-128 Hawkes Bay earthquake (1931) 112, 167, 183, 207 Hawkes Bay Earthquake Act (1931) J see legislation Japan 10, 44-45, 71-72, 73, 191, 201-204 hazard mapping 8, 49, 57, 61, 112-113 see also Kobe, Hanshin earthquake hazardous materials 52 Jones, Barclay 76 heavy equipment 9 Jovel, Roberto 66, 67 health 186 Helm, Pat 35, 36 Henri, Christopher 61, 93, 131, 157, 198, 229-244, 271 K Heritage Council (Australia) 240 Kanemitsu, Kiyoyuki 201-204 hidden costs 188-189 Kanto earthquake (1923) 207 hidden damage 223 kinship model 84 highway system 210 Kobe 10, 11, 37, 44-45, 71-72, 73, 93, 98, 147, 152-153, historic buildings 58, 240 191, 201-204, 205-207, 218, 224, 226, 271 Hodge, W C 131 see also Hanshin earthquake Holmes, Sir Frank 263-270, 272 Kuwait oil fires (1991) 140-141, 158 homeless 84, 177, 194, 203 Hopkins, David 37, 61, 111-120, 157, 158, 197, 271 housing 5, 52, 186-187, 205 L Hurricane Hugo (1989) 68, 99 labour 9, 116-117, 118-119, 129-131, 194 Hurricane Andrew (1992) 68, 82, 101, 103, 157, 219 labour resources 129, 141 lahar flows 211 I Laird, Margaret 35, 36 Lamb, John 36 ideal city 55 Lambton Harbour 57, 59 Inangahua earthquake (1968) 145, 271 landslips 4, 51, 148, 157, 186 income 185-186 landuse patterns 53 indemnity 241 language problem 93, 185 indirect costs 268, 276 multi-language handouts 142 indirect damages 65 Lanigan, Tony 121-135, 157, 158, 171 indirect loss model 11, 70 LaPlante, J M 25

281 Wellington After the Quake lead agency 30-31, 61, 272 Maori liaison officers 178 leadership 30-31, 99, 212 Maori Wardens Association 178 legislation 9, 10, 35-37, 161-169, 171, 197, 276 Maori Women’s Welfare League 178 Australian Insurance Contracts Act (1984) 239 marae (meeting centre) 176-177, 178 Building Act (1991) 9, 153, 163-164, 168 market demands 68 Civil Defence Act (1983) 9, 17, 24, 28-29, 146, 154, market response 157 167, 169, 192, 197, 246 masonry 48, 112, 124 Darwin Reconstruction Act (1975) 31, 232 Master Builders Association (Australia) 132 Earthquake Commission Act (1993) 193, 245 materials 116-117, 118-119, 122-128 Hawkes Bay Earthquake Act (1931) 167 maximum credible event 4, 32 Local Government Act (1974) 28, 167, 169 May, Peter 101 Resource Management Act (1991) 9, 161-163, 164, McCormick, Dave 227-228 168, 193, 276 McDonald, Christopher 55-60, 62 Leslie, Peter, 271 McLean, Ian 36, 158, 275-277 Lesser, Giles, 158 memoranda of understanding 30, 35-36, 98 liability 61 Mexico 65, 69, 70, 74, 93 Life Offices Association 266, 272 Mexico City earthquake (1984) 103 lifelines 5, 88-89, 93, 112, 202, 206, 248-249, 256, 265, microzoning 271 276 Middleton, David 245-253, 271 communications 5, 62, 89, 114-115, 127, 202, 203, Mileti, Dennis 41-46, 61 206, 249 Mill, John Stuart 65 cellular and satellite 143, 203 Miller, Graham 35, 197 electricity supply 5, 88, 89, 114-115, 127, 202, 206 Milne, Peter 171 gas supply 89, 114-115, 202, 206 Ministry of Civil Defence 28, 29, 188, 191, 271, 276 loss 89 mitigation 48, 61, 74, 81, 85, 93, 99, 112, 195, 214 providers 25 monuments 58, 241 transportation 48, 93, 146, 158, 202, 276 moratorium 168 airport 5, 113, 114-115, 146 motor vehicle assessors 232 rail 5, 114-115, 146, 177, 202, 203 Murchison earthquake (1929) 145, 207 roading 5, 114-115, 146, 148, 149, 150, 158, 177, 194, 202, 203 water supply 88-89, 90, 114-115, 141, 194, 202, 206, N 207 Napier earthquake liquefaction 4, 49, 51, 59, 61, 150, 186, 202, 206, 213 see Hawkes Bay earthquake local community participation 213 National Civil Defence Plan 29, 188 local government National Contingency Plan 17, 18, 19 see government national debt 197 Local Government Act National Institute for Buildings Standards 67 see legislation New Zealand Maori Council 178 logistics 9, 145-154, 211, 276 New Zealand National Society for Earthquake Loma Prieta earthquake (1989) 23, 48, 49, 52, 68, 87, 98, Engineering 205, 251 100, 103, 139, 186, 187, 226 Newcastle earthquake (1989) 61, 121, 131-132, 157, 198, Los Angeles Recovery and Reconstruction Plan 50, 61, 235-242, 258, 271 188 news media 98, 142, 251 loss potential 256-257 NIBS Indirect Loss Model 70-71, 77-79 loss adjusters 131, 231, 234 Nigg, Joanne 81-92, 93 loss adjusting 236-237 non-family households 186 loss control 225-226 noninsurance 10, 93, 185, 243, 248 loss experience 256 Norman, Ruth 35, 62 loss frequency relationship 259-260 Northridge earthquake (1994) 23, 48, 50, 51, 68, 84, 85, loss ratio 220 88, 98, 139, 152, 153, 158, 165, 186, 218, 220-226, Losse, Dieter 272 227-228, 246, 249, 258 Luzon 209 Norton, John 35, 157 see also Philippines notification of claims 237-238 nuisance claims 197, 225 M Macaskill, Stuart 61, 62 O macroeconomic effects 66 Officer, Paul 35, 36, 37 Maher, Jules 197 O’Kane, Kevin 171 Maori 8, 175-179 overseas organisations 9, 139, 148, 197

282 overview authority 146 relocation 7, 41-46, 48, 61, 233 Owens, Dave 158, 197 finances 45 of business 52 of government 20, 35 P see also government, continuity of Packham, Colin 271 Valdez, Alaska 42 Park, Robert 205-207 repair 113 paving 128 replacement 113 Petak, W J 25, 27 replacement reconstruction phase 81 Philippines 10, 145-146, 147, 148, 209-214 rescue workers 202 phone services 88 Reserve Bank (New Zealand) 263, 265, 266-268, 269 physical resources and logistics 9 Resource Management Act Pinatubo eruption (1991) 209, 210-212, 213, 214 see legislation plan implementation 141 resources 117, 249-250 planning for reconstruction 47 for reinstatement 111-119 plant 116-117, 118-119, 128-129, 150 response phase 35-36, 47 plasterboard 126 responsibilities 192, 195, 265 plumbing/drainage 127 responsibility (for recovery) port 114-115, 150, 201, 202-203, 206 central government 7, 24-25, 26, 36-37 post-disaster inflation 157 local government 36-37 post-quake demand (for building construction) 157 restoration phase 47, 81 pre-event planning 7-8, 27, 43-44, 275 retrofitting 197-198, 206, 225 preparedness 74, 207, 237, 249, 264 risk analysis software 260 Presidential Task Force for Reconstruction (Philippines) risk assessment 219, 259, 261 147, 212 risk management 192, 193, 195, 197, 226, 255-261 price stability 272 risk selection 220 priorities 36, 102, 146, 165-166, 211, 275 roading 5, 114-115, 146, 148, 149, 150, 158, 177, 194, private sector 25, 36, 61, 121, 131-133, 275, 277 202, 203 procurement pipeline 140 Roberts, John 15-21, 35 procurement sources 141 Roberts, Trevor 61, 171 production facilities 68 Rocky Mountain Model 100-101 production/supply capacity 122 Rolfe, Jim 23-33, 35 programme management 141 roll-on/roll-off ships 158 project information memoranda 163-164 Rowan, Jenny 197 psychological effects of disasters 45, 187-188, 197 Ruaumoko (god of earthquakes) 175-176 Rubin, Claire 97-110, 157 Ryan, Des 168 Q Quake Recovery Plan 139 S Sachs, Jeffrey 69-70 R salvage 233 San Bernadino, California 42 rail 5, 114-115, 146, 177, 202, 203 Scawthorn, Charles 217-228 rebuilding stimulus 71 scenario (conference) 3-5 reclamations 5, 49, 57, 59 scenarios 259 reconstruction 7, 8, 41, 42-45, 47-53, 97-104, 157-158, Schaad, Werner, 255-261, 271, 272 165-166 scientific community 251 reconstruction phase 47, 122 Scott, Rachel 36, 183-190, 197 reconstruction plan 50 sea freight 146 recovery management 9 seismic building standards 143 recovery planning 7, 25-28, 266 seismic codes 205-206 Australia 26 seismic inventory 157, 158 New Zealand 28-29 seismic risk 44-45, 49, 112-113 Wellington 29-31 seismological data 222 United States 26 self-determination 183 recovery support co-ordinator 36, 194 sewerage system 89, 114-115, 194 refuge centres 207 shelters 8, 84, 178, 186-187, 207 regional government 25 (as local government) slumping 148 reinforcing steel 125-126 Smith, Heather 35, 197 reinsurance 10-11, 194, 197, 250, 250-251, 255-261, 268 Smith, W Rodney 217-228 reinsurance capacity 10-11

283 Wellington After the Quake

Smith, William Mein 57 vulnerability 8, 62, 185, 223 social impact 8, 186, 189, 195, 235, 275 social networks 8, 82, 177 social process 26, 81-90, 93 W social services 183, 188 Walker, George 36, 93, 157, 197 socioeconomic status 45, 85-86 Wairarapa earthquake (1855) 145, 207 source of last resort (funding) 197 Wakefield, Edward Gibbon 56 South Australian Health Commission 235 Washburn, W R 139-143, 158 Southland floods (1984) 186, 187 water supply 88-89, 90, 114-115, 141, 194, 202, 206, 207 Spitak earthquake (1988) 42 Wegener, Alfred 15 staging centre 158 Wellington Basin Forum 30, 35, 36 standards 171 Wellington City Disaster Recovery Plan 133 state of emergency 17, 28 Wellington City Disaster Recovery Planning Guide 188 Steenson, Jerry 65-79 Wellington City Proposed District Plan 163 Steven, Leicester 171 Wellington Earthquake Lifelines Group 9, 29, 35, 36, 132, stock exchange 267 133 stockpiles 158 Wellington Emergency Management Office 50, 165, 188 stormwater 114-115 Wellington emergency management system 31 strategic planning 97, 276 Wellington emergency strategic plan 30 strategic stockpiles 9 Wellington fault 47, 49, 191, 222 streamlined procedures 51 Wellington recovery planning guide 30 stress 45, 187 whakapapa (genealogy) 176 structural steel 112, 126 whanau (extended family) 176 supply shortages 68 Whittier Narrows earthquake (1987) 26, 43, 48, 52 support services 141-142 Wiltshire, Jim 162 Survival Manual for Local Governments 102 windows/glazing 126-127 Wong, Mandy 197 T Wood, John 158 Taal volcano 209 tangata whenua (local tribe) 177 X, Y, Z tank-landing type vessels 150 Xenia tornado (1974) 87 telecommunications 5, 89, 114-115, 202 Yanev, Peter 197, 217-228, 271 temporary housing 140, 143 Zedillio, Ernesto 65 territorial authorities 30, 162, 163, 164, 166, 168-169, 276 zoning 61 timber 112, 124-125 timescale 98, 101, 103-104, 276 total assets 117 Transmission Gully 158, 197, 276 transportation 48, 93, 146, 158, 202, 276 trauma 236, 247 Treasury 269, 270, 272 trucks 129 Tyler, George 197

U underinsurance 10, 157, 223, 243, 271 unemployed 85, 185 urban design 8 urban relocation 41-46 urban-rural differences 86-87 utilities 5 utopia 56

V Valdez, Alaska earthquake (1964) 42 valuations 171 value loss 201 volunteer workers 26

284 EARTHQUAKE COMMISSION

The Earthquake Commission (EQC) was established in 1945 and provides natural disaster insurance to residential property owners.

EQC is a Crown Entity, wholly owned by the Government of New Zealand, with a seven person Board of Commissioners, a General Manager, a staff of 12 and one office in the capital, Wellington. Crown Entities are organisations that are not government departments or state-owned enterprises but nevertheless belong to the Government and are subject to public sector finance and reporting rules.

EQC is the primary provider in New Zealand of certain natural disaster insurance to residential property owners. It also offers limited cover to non-residential property owners until 1996. EQC administers the Natural Disaster Fund, comprising capital and reserves. The Government guarantees that this fund will meet all its obligations.

EQC's role is to help New Zealanders recover from the effects of natural disasters. It does this by securing New Zealand residential property owners against the cost of natural disasters and by helping organise repair and replacement after the event. The main mechanism for this is the provision of natural disaster insurance to property owners who insure against fire.

In a time of disaster, EQC works through the insurance industry's co-operative emergency plan and a network of private assessors who evaluate and help process claims. EQC's Disaster Plan also provides for an alternative operations site and provision of additional staff and equipment.

EQC also encourages and funds research about matters relevant to natural disaster damage and it educates and otherwise informs people about what can be done to prevent and mitigate damage caused by natural disasters.

For further information on EQC contact:

Earthquake Commission Chairperson: Ian McLean (to 30 June 1995) PO Box 311 General Manager: David A Middleton Wellington New Zealand Telephone +64 4 499 0045 Facsimile +64 4 499 0046

CENTRE FOR ADVANCED ENGINEERING

The Centre for Advanced Engineering was founded in May 1987 to mark the centenary of the School of Engineering at the Univer- sity of Canterbury.

The objective of the Centre is to enhance engineering knowledge within New Zealand in identified areas judged to be of national importance and to engage in technology transfer of the latest research information available from overseas. The Centre is not concerned with basic engineering research, but with the application of research findings to engineering problems.

The Centre undertakes major projects, bringing together a selected group of practising and research engineers and experts in the particular field from both New Zealand and overseas to:

• consolidate existing knowledge • study advanced techniques • develop approaches to particular problems in engineering and technology • promote excellence in engineering • disseminate findings through documentation and public seminars.

The Centre also facilitates joint publications with other organisations, carries out smaller projects on engineering subjects of current concern, and arranges lectures and seminars on appropriate topics as the occasion arises.

For further information on the Centre's activities and publications, contact:

Centre for Advanced Engineering Executive Director: John P Blakeley University of Canterbury Projects Director: John L Lumsden Private Bag 4800 Christchurch New Zealand Telephone: +64 3 364 2478 Facsimile: +64 3 364 2069 e-mail: [email protected]